FCNCN filing — read by section

Item 1. Financial Statements

Item 1. Financial Statements. 
 
 First Citizens BancShares, Inc. and Subsidiaries 
 Consolidated Balance Sheets (Unaudited) 
 
 dollars in millions, except share data September 30, 2025 December 31, 2024 
 Assets 
 Cash and due from banks $ 874 $ 814 
 Interest-earning deposits at banks 24,798 21,364 
 Securities purchased under agreements to resell 83 158 
 Investment in marketable equity securities (cost of $ 78 at September 30, 2025 and $ 79 at December 31, 2024) 
 110 101 
 Investment securities available for sale (cost of $ 35,187 at September 30, 2025 and $ 34,512 at December 31, 2024) 
 34,963 33,750 
 Investment securities held to maturity (fair value of $ 8,838 at September 30, 2025 and $ 8,702 at December 31, 2024) 
 10,051 10,239 
 Assets held for sale 112 85 
 Loans and leases 144,758 140,221 
 Allowance for loan and lease losses ( 1,652 ) ( 1,676 ) 
 Loans and leases, net of allowance for loan and lease losses 143,106 138,545 
 Operating lease equipment, net 9,446 9,323 
 Premises and equipment, net 2,283 2,006 
 Goodwill 346 346 
 Other intangible assets, net 208 249 
 Other assets 7,108 6,740 
 Total assets $ 233,488 $ 223,720 
 Liabilities 
 Deposits: 
 Noninterest-bearing $ 42,752 $ 38,633 
 Interest-bearing 120,438 116,596 
 Total deposits 163,190 155,229 
 Credit balances of factoring clients 1,326 1,016 
 Borrowings: 
 
 Short-term borrowings 423 367 
 
 Long-term borrowings 38,252 36,684 
 Total borrowings 38,675 37,051 
 Other liabilities 8,311 8,196 
 Total liabilities 211,502 201,492 
 Stockholders’ equity 
 Preferred stock - $ 0.01 par value ( 20,000,000 shares authorized at September 30, 2025 and December 31, 2024) 
 881 881 
 Common stock: 
 Class A - $ 1 par value ( 32,000,000 shares authorized at September 30, 2025 and December 31, 2024; 11,613,444 and 12,712,436 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively) 
 12 13 
 Class B - $ 1 par value ( 2,000,000 shares authorized and 1,005,185 shares issued and outstanding at September 30, 2025 and December 31, 2024) 
 1 1 
 Additional paid in capital 270 2,417 
 Retained earnings 20,866 19,361 
 Accumulated other comprehensive loss ( 44 ) ( 445 ) 
 Total stockholders’ equity 21,986 22,228 
 Total liabilities and stockholders’ equity $ 233,488 $ 223,720 

 See accompanying Notes to the Unaudited Consolidated Financial Statements. 
 
 4 

 First Citizens BancShares, Inc. and Subsidiaries 
 Consolidated Statements of Income (Unaudited) 
 
 Three Months Ended September 30, Nine Months Ended September 30, 
 dollars in millions, except share and per share data 2025 2024 2025 2024 
 Interest income 
 Interest and fees on loans $ 2,300 $ 2,430 $ 6,806 $ 7,206 
 Interest on investment securities 433 358 1,266 970 
 Interest on deposits at banks 265 350 766 1,176 
 Total interest income 2,998 3,138 8,838 9,352 
 Interest expense 
 Deposits 911 1,004 2,698 2,907 
 Borrowings 353 338 1,048 1,011 
 Total interest expense 1,264 1,342 3,746 3,918 
 Net interest income 1,734 1,796 5,092 5,434 
 Provision for credit losses 191 117 460 276 
 Net interest income after provision for credit losses 1,543 1,679 4,632 5,158 
 Noninterest income 
 Rental income on operating lease equipment 273 262 815 776 
 Lending-related fees 67 67 202 189 
 Deposit fees and service charges 61 57 178 172 
 Client investment fees 58 55 163 159 
 Wealth management services 57 54 168 157 
 International fees 34 29 99 86 
 Factoring commissions 18 19 53 55 
 Cardholder services, net 39 42 121 122 
 Merchant services, net 12 12 39 36 
 Insurance commissions 13 14 41 42 
 Realized gain on sale of investment securities, net — 4 — 4 
 Fair value adjustment on marketable equity securities, net 13 9 10 3 
 Gain on sale of leasing equipment, net 3 5 16 19 
 
 Loss on extinguishment of debt — — — ( 2 ) 
 Other noninterest income 51 21 107 98 
 Total noninterest income 699 650 2,012 1,916 
 Noninterest expense 
 Depreciation on operating lease equipment 98 99 296 293 
 Maintenance and other operating lease expenses 67 59 180 164 
 Personnel cost 817 788 2,445 2,277 
 Net occupancy expense 58 62 177 182 
 Equipment expense 137 128 404 368 
 Professional fees 26 42 81 91 
 Third-party processing fees 67 55 193 173 
 FDIC insurance expense 38 31 114 105 
 Marketing expense 33 20 97 52 
 Acquisition-related expenses 28 46 108 148 
 Intangible asset amortization 13 15 41 47 
 Other noninterest expense 109 111 348 318 
 Total noninterest expense 1,491 1,456 4,484 4,218 
 Income before income taxes 751 873 2,160 2,856 
 Income tax expense 183 234 534 779 
 Net income $ 568 $ 639 $ 1,626 $ 2,077 
 Preferred stock dividends 14 15 43 46 
 Net income available to common stockholders $ 554 $ 624 $ 1,583 $ 2,031 
 Earnings per common share 
 Basic $ 43.08 $ 43.42 $ 119.70 $ 140.27 
 Diluted $ 43.08 $ 43.42 $ 119.70 $ 140.26 
 Weighted average common shares outstanding 
 Basic 12,849,339 14,375,974 13,217,940 14,480,874 
 Diluted 12,849,339 14,375,974 13,217,940 14,481,919 
 
 See accompanying Notes to the Unaudited Consolidated Financial Statements. 
 5 

 First Citizens BancShares, Inc. and Subsidiaries 
 Consolidated Statements of Comprehensive Income (Unaudited) 
 
 Three Months Ended September 30, Nine Months Ended September 30, 
 dollars in millions 2025 2024 2025 2024 
 Net income $ 568 $ 639 $ 1,626 $ 2,077 
 Other comprehensive income, net of tax 
 Net unrealized gain on securities available for sale 72 438 400 325 
 Net change in unrealized loss on securities available for sale transferred to securities held to maturity — 1 — 1 
 Net change in defined benefit pension items ( 1 ) — ( 4 ) ( 8 ) 
 
 Net unrealized (loss) gain on cash flow hedge derivatives ( 1 ) 12 5 14 
 Other comprehensive income, net of tax $ 70 $ 451 $ 401 $ 332 
 Total comprehensive income $ 638 $ 1,090 $ 2,027 $ 2,409 

 See accompanying Notes to the Unaudited Consolidated Financial Statements. 
 
 6 

 First Citizens BancShares, Inc. and Subsidiaries 
 Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) 
 
 Three Months Ended 
 dollars in millions, except per share data Preferred Stock Class A Common Stock Class B Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders' Equity 
 Balance at June 30, 2025 $ 881 $ 12 $ 1 $ 1,179 $ 20,337 $ ( 114 ) $ 22,296 
 Net income — — — — 568 — 568 
 Other comprehensive income, net of tax — — — — — 70 70 
 
 Repurchased 457,350 shares of Class A common stock 
 — — — ( 909 ) — — ( 909 ) 
 Cash dividends declared ($ 1.95 per common share): 
 
 Class A common stock — — — — ( 23 ) — ( 23 ) 
 Class B common stock — — — — ( 2 ) — ( 2 ) 
 Preferred stock dividends declared: 
 Series A — — — — ( 5 ) — ( 5 ) 
 Series B — — — — ( 7 ) — ( 7 ) 
 Series C — — — — ( 2 ) — ( 2 ) 
 Balance at September 30, 2025 $ 881 $ 12 $ 1 $ 270 $ 20,866 $ ( 44 ) $ 21,986 
 
 Balance at June 30, 2024 $ 881 $ 14 $ 1 $ 4,099 $ 18,102 $ ( 610 ) $ 22,487 
 Net income — — — — 639 — 639 
 Other comprehensive income, net of tax — — — — — 451 451 
 
 Stock based compensation — — — ( 4 ) — — ( 4 ) 
 Repurchased 353,058 shares of Class A common stock 
 — ( 1 ) — ( 706 ) — — ( 707 ) 
 Cash dividends declared ($ 1.64 per common share): 
 
 Class A common stock — — — — ( 21 ) — ( 21 ) 
 Class B common stock — — — — ( 2 ) — ( 2 ) 
 Preferred stock dividends declared: 
 Series A — — — — ( 5 ) — ( 5 ) 
 Series B — — — — ( 8 ) — ( 8 ) 
 Series C — — — — ( 2 ) — ( 2 ) 
 Balance at September 30, 2024 $ 881 $ 13 $ 1 $ 3,389 $ 18,703 $ ( 159 ) $ 22,828 

 7 

 Nine Months Ended 
 dollars in millions, except share data Preferred Stock Class A Common Stock Class B Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders' Equity 
 Balance at December 31, 2024 $ 881 $ 13 $ 1 $ 2,417 $ 19,361 $ ( 445 ) $ 22,228 
 Net income — — — — 1,626 — 1,626 
 Other comprehensive income, net of tax — — — — — 401 401 
 
 Repurchased 1,098,992 shares of Class A common stock 
 — ( 1 ) — ( 2,147 ) — — ( 2,148 ) 
 Cash dividends declared ($ 5.85 per common share): 
 
 Class A common stock — — — — ( 72 ) — ( 72 ) 
 Class B common stock — — — — ( 6 ) — ( 6 ) 
 Preferred stock dividends declared: 
 Series A — — — — ( 14 ) — ( 14 ) 
 Series B — — — — ( 21 ) — ( 21 ) 
 Series C — — — — ( 8 ) — ( 8 ) 
 Balance at September 30, 2025 $ 881 $ 12 $ 1 $ 270 $ 20,866 $ ( 44 ) $ 21,986 
 
 Balance at December 31, 2023 $ 881 $ 14 $ 1 $ 4,108 $ 16,742 $ ( 491 ) $ 21,255 
 Net income — — — — 2,077 — 2,077 
 Other comprehensive income, net of tax — — — — — 332 332 
 
 Stock based compensation — — — ( 13 ) — — ( 13 ) 
 Repurchased 353,058 shares of Class A common stock 
 — ( 1 ) — ( 706 ) — — ( 707 ) 
 Cash dividends declared ($ 4.92 per common share): 
 
 Class A common stock — — — — ( 65 ) — ( 65 ) 
 Class B common stock — — — — ( 5 ) — ( 5 ) 
 Preferred stock dividends declared: 
 Series A — — — — ( 14 ) — ( 14 ) 
 Series B — — — — ( 24 ) — ( 24 ) 
 Series C — — — — ( 8 ) — ( 8 ) 
 Balance at September 30, 2024 $ 881 $ 13 $ 1 $ 3,389 $ 18,703 $ ( 159 ) $ 22,828 

 See accompanying Notes to the Unaudited Consolidated Financial Statements. 
 8 

 First Citizens BancShares, Inc. and Subsidiaries 
 Consolidated Statements of Cash Flows (Unaudited) 
 
 Nine Months Ended September 30, 
 dollars in millions 2025 2024 
 CASH FLOWS FROM OPERATING ACTIVITIES 
 Net income $ 1,626 $ 2,077 
 Adjustments to reconcile net income to cash provided by operating activities: 
 Provision for credit losses 460 276 
 Deferred tax benefit ( 104 ) ( 127 ) 
 Depreciation, amortization, and accretion, net 284 36 
 
 Realized gain on sale of investment securities, net — ( 4 ) 
 Fair value adjustment on marketable equity securities, net ( 10 ) ( 3 ) 
 Gain on sale of loans, net ( 12 ) ( 7 ) 
 Gain on sale of operating lease equipment, net ( 16 ) ( 19 ) 
 Loss on sale of premises and equipment, net — 1 
 Gain on other real estate owned, net ( 1 ) ( 6 ) 
 
 Loss on extinguishment of debt — 2 
 Origination of loans held for sale ( 1,011 ) ( 799 ) 
 Proceeds from sale of loans held for sale 1,137 867 
 Impairment of premises and equipment 5 — 
 Net change in other assets ( 86 ) ( 169 ) 
 Net change in other liabilities ( 345 ) ( 245 ) 
 Other operating activities ( 54 ) ( 11 ) 
 Net cash provided by operating activities 1,873 1,869 
 CASH FLOWS FROM INVESTING ACTIVITIES 
 Net (increase) decrease in interest-earning deposits at banks ( 3,434 ) 7,969 
 Purchases of marketable equity securities — ( 6 ) 
 Proceeds from sales of investments in marketable equity securities — 15 
 Purchases of investment securities available for sale ( 7,476 ) ( 13,339 ) 
 Proceeds from maturities of investment securities available for sale 5,802 5,036 
 Proceeds from sales of investment securities available for sale 1,196 695 
 Purchases of investment securities held to maturity ( 389 ) ( 791 ) 
 Proceeds from maturities of investment securities held to maturity 598 401 
 Net decrease in securities purchased under agreements to resell 75 18 
 Net increase in loans ( 4,987 ) ( 5,606 ) 
 Proceeds from sales of loans 220 244 
 Net increase in credit balances of factoring clients 392 161 
 Purchases of operating lease equipment ( 522 ) ( 793 ) 
 Proceeds from sales of operating lease equipment 195 149 
 Purchases of premises and equipment ( 467 ) ( 301 ) 
 
 Proceeds from sales of other real estate owned 20 16 
 
 Other investing activities ( 463 ) ( 279 ) 
 Net cash used in investing activities ( 9,240 ) ( 6,411 ) 
 CASH FLOWS FROM FINANCING ACTIVITIES 
 Net decrease in time deposits ( 2,178 ) ( 2,295 ) 
 Net increase in demand and other interest-bearing deposits 10,312 8,063 
 Net increase (decrease) in securities sold under agreements to repurchase 56 ( 94 ) 
 
 Repayment of long-term borrowings ( 355 ) ( 348 ) 
 Proceeds from issuance of long-term borrowings 1,839 — 
 
 Repurchase of Class A common stock ( 2,127 ) ( 700 ) 
 Cash dividends paid ( 121 ) ( 116 ) 
 Other financing activities 1 ( 14 ) 
 Net cash provided by financing activities 7,427 4,496 
 
 Change in cash and due from banks 60 ( 46 ) 
 Cash and due from banks at beginning of period 814 908 
 Cash and due from banks at end of period $ 874 $ 862 

 9 

 Nine Months Ended September 30, 
 dollars in millions 2025 2024 
 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION 
 Cash paid during the period for: 
 Interest $ 3,663 $ 4,005 
 Income taxes 289 754 
 Significant non-cash investing and financing activities: 
 Transfers of loans to other real estate 55 1 
 
 Net settlement with FDIC for Purchase Money Note — 80 
 
 Transfer of assets from held for investment to held for sale 401 329 
 Transfer of assets from held for sale to held for investment 28 25 
 
 Commitments extended during the period on affordable housing investment credits 454 360 
 
 See accompanying Notes to the Unaudited Consolidated Financial Statements. 
 
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 First Citizens BancShares, Inc. and Subsidiaries 
 Notes to Unaudited Consolidated Financial Statements 
 
 NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION 
 
 Nature of Operations 
 First Citizens BancShares, Inc. (the “Parent Company” and, when including all of its subsidiaries on a consolidated basis, “we,” “us,” “our,” “BancShares”) is a financial holding company organized under the laws of Delaware that conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (“FCB”), which is headquartered in Raleigh, North Carolina. BancShares operates a network of branches and offices, predominantly located in the Southeast, Mid-Atlantic, Midwest and Western United States. BancShares provides various types of commercial and consumer banking services, including lending, leasing, and wealth management services. Deposit services include checking, savings, money market, and time deposit accounts. 
 
 BASIS OF PRESENTATION 
 
 Principles of Consolidation and Basis of Presentation 
 These consolidated financial statements and notes thereto are presented in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the consolidated financial position and consolidated results of operations have been made. The unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with the Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). Interim results are not necessarily indicative of results for a full year. 
 
 The consolidated financial statements of BancShares include the accounts of BancShares and its subsidiaries, certain partnership interests and variable interest entities (“VIEs”) where BancShares is the primary beneficiary, if applicable. All significant intercompany accounts and transactions are eliminated upon consolidation. Assets held in agency or fiduciary capacity are not included in the consolidated financial statements. Refer to Note 8—Variable Interest Entities for additional information regarding VIEs. 
 
 Reclassifications 
 
 Financial Statements 
 In certain instances, amounts reported in the 2024 consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported stockholders’ equity or net income. 
 
 Changes to the Composition of Reportable Segments 
 We updated our segment reporting during the first quarter of 2025 (the “Segment Reporting Updates”) as we transferred certain components from the Silicon Valley Bank (“SVB”) Commercial and General Bank segments to the Commercial Bank segment and modified our segment expense allocation methodology. The Segment Reporting Updates did not result in the addition or removal of any of our existing segments at December 31, 2024, and the global fund banking and investor dependent loan portfolios, as well as a substantial portion of the cash flow dependent and innovation commercial and industrial (“innovation C&I”) loans, remain in the SVB Commercial segment. Segment disclosures for 2024 periods included in this Form 10-Q were recast to conform with the Segment Reporting Updates summarized above. Refer to Note 17—Segment Information for additional information. 
 
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 2025 Loan Class Changes 
 At December 31, 2024, our disclosures for loans and leases and the allowance for loan and lease losses (“ALLL”) were aggregated into Commercial, Consumer, and SVB portfolios, each of which consisted of several loan classes as summarized below: 
 • The Commercial portfolio consisted of the following loan classes: commercial construction, owner occupied commercial mortgage, non-owner occupied commercial mortgage, commercial and industrial, and leases. 
 • The Consumer portfolio consisted of the following loan classes: residential mortgage, revolving mortgage, consumer auto, and consumer other. 
 • The SVB portfolio consisted of the following loan classes: global fund banking, investor dependent - early stage, investor dependent - growth stage, and cash flow dependent and innovation C&I. 
 
 For further descriptions of these loan classes, refer to Note 1—Significant Accounting Policies and Basis of Presentation in the Notes to the Consolidated Financial Statements included in our 2024 Form 10-K. 
 
 During the second quarter of 2025, the loan classes which were reported in the SVB portfolio in the 2024 Form 10-K were recast to the Commercial portfolio (the “2025 Loan Class Changes”) as summarized below: 
 • Global fund banking remained a separate loan class, but is reported under the Commercial portfolio. 
 • Investor dependent–early stage and investor dependent–growth stage were combined into a single investor dependent loan class, which is reported under the Commercial portfolio. 
 • Cash flow dependent and innovation C&I was combined with the commercial and industrial loan class, which is reported under the Commercial portfolio. 
 Loan and lease and ALLL disclosures for all periods presented in this Form 10-Q were recast to reflect the 2025 Loan Class Changes. Refer to Note 4—Loans and Leases and Note 5—Allowance for Loan and Lease Losses. 
 
 The disclosures in Note 17—Segment Information were not recast as a result of the 2025 Loan Class Changes because the composition of reportable segments is separate and distinct from the identification of loan classes. 
 
 Use of Estimates in the Preparation of Financial Statements 
 The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions impact the amounts reported in the consolidated financial statements and accompanying notes and the disclosures provided, and actual results could differ from those estimates. The significant estimate related to the determination of the ALLL is considered a critical accounting estimate. 
 
 SIGNIFICANT ACCOUNTING POLICIES 
 
 Significant accounting policies are described in the 2024 Form 10-K. There were no material changes to these policies during the nine months ended September 30, 2025. 
 
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 NOTE 2 — BUSINESS COMBINATIONS 
 
 Pending Branch Acquisition 
 On October 16, 2025, FCB announced that it had entered into an agreement to consummate the acquisition of 138 branches from BMO Bank N.A. (“BMO Bank”) located throughout the Midwest, Great Plains and West regions of the U.S. (the “BMO Branch Acquisition”). In connection with the BMO Branch Acquisition, FCB expects to assume approximately $ 5.7 billion in deposit liabilities and acquire approximately $ 1.1 billion in loans. We expect the transaction to close in mid-2026, subject to customary closing terms and conditions and regulatory approvals. 
 
 Completed Acquisition 
 On March 27, 2023 (the “SVBB Acquisition Date”), FCB acquired substantially all loans and certain other assets and assumed all customer deposits and certain other liabilities of Silicon Valley Bridge Bank, N.A. (“SVBB”) from the Federal Deposit Insurance Corporation (the “FDIC”) pursuant to the terms of a purchase and assumption agreement (the “SVBB Purchase Agreement”) by and among FCB, the FDIC, and the FDIC, as receiver of SVBB (the “SVBB Acquisition”). 
 
 In connection with the SVBB Purchase Agreement, FCB entered into a commercial shared loss agreement with the FDIC (the “Shared-Loss Agreement”). On April 7, 2025, FCB and the FDIC entered into an agreement (the “Shared-Loss Termination Agreement”) to terminate the Shared-Loss Agreement. As a result of entering into the Shared-Loss Termination Agreement, all rights and obligations of the parties under the Shared-Loss Agreement terminated as of the date of the Shared-Loss Termination Agreement, including FCB’s reporting covenants and obligations related to FDIC Loss Sharing and FCB reimbursement (each as defined in Note 2—Business Combinations in our 2024 Form 10-K). There was no impact to our consolidated balance sheets or statements of income resulting from the Shared-Loss Termination Agreement because there was no loss indemnification asset or true-up liability associated with the Shared-Loss Agreement, primarily based on evaluation of historical loss experience and the credit quality of the Covered Assets (as defined in Note 2—Business Combinations in our 2024 Form 10-K). 
 
 In connection with the SVBB Acquisition, FCB issued a five-year $ 36.07 billion note payable to the FDIC, maturing March 27, 2028, which was amended and restated on November 20, 2023 (the “Purchase Money Note”). FCB and the FDIC, as lender and as collateral agent, also entered into an Advance Facility Agreement, dated as of the SVBB Acquisition Date, and effective as of November 20, 2023 (the “Advance Facility Agreement”), which provided total advances available through March 27, 2025 of up to $ 70 billion solely to provide liquidity to offset deposit withdrawal or runoff of former SVBB deposit accounts and to fund the unfunded commercial lending commitments acquired in the SVBB Acquisition. There were no amounts outstanding on the facility at the end of the draw period on March 27, 2025. 
 
 Refer to Note 2—Business Combinations in our 2024 Form 10-K for further discussion of the SVBB Acquisition, Purchase Money Note, and the Advance Facility Agreement. 
 
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 NOTE 3 — INVESTMENT SECURITIES 
 
 The following tables include the amortized cost and fair value of investment securities: 
 
 Amortized Cost and Fair Value - Investment Securities 
 
 dollars in millions September 30, 2025 
 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 
 Investment securities available for sale 
 U.S. Treasury $ 13,729 $ 54 $ ( 2 ) $ 13,781 
 Government agency 53 — ( 1 ) 52 
 Residential mortgage-backed securities 17,550 236 ( 351 ) 17,435 
 Commercial mortgage-backed securities 3,582 27 ( 181 ) 3,428 
 Corporate bonds 256 — ( 6 ) 250 
 Municipal bonds 17 — — 17 
 
 Total investment securities available for sale $ 35,187 $ 317 $ ( 541 ) $ 34,963 
 Investment in marketable equity securities $ 78 $ 33 $ ( 1 ) $ 110 
 Investment securities held to maturity 
 U.S. Treasury $ 387 $ — $ ( 18 ) $ 369 
 Government agency 1,459 — ( 64 ) 1,395 
 Residential mortgage-backed securities 4,568 28 ( 513 ) 4,083 
 Commercial mortgage-backed securities 3,358 — ( 625 ) 2,733 
 
 Supranational securities 277 — ( 21 ) 256 
 Other 2 — — 2 
 Total investment securities held to maturity $ 10,051 $ 28 $ ( 1,241 ) $ 8,838 
 Total investment securities $ 45,316 $ 378 $ ( 1,783 ) $ 43,911 
 
 December 31, 2024 
 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 
 Investment securities available for sale 
 U.S. Treasury $ 13,897 $ 33 $ ( 27 ) $ 13,903 
 Government agency 79 — ( 2 ) 77 
 Residential mortgage-backed securities 16,161 41 ( 582 ) 15,620 
 Commercial mortgage-backed securities 3,869 7 ( 210 ) 3,666 
 Corporate bonds 489 — ( 22 ) 467 
 Municipal bonds 17 — — 17 
 Total investment securities available for sale $ 34,512 $ 81 $ ( 843 ) $ 33,750 
 Investment in marketable equity securities $ 79 $ 27 $ ( 5 ) $ 101 
 Investment securities held to maturity 
 U.S. Treasury $ 483 $ — $ ( 31 ) $ 452 
 Government agency 1,489 — ( 115 ) 1,374 
 Residential mortgage-backed securities 4,558 2 ( 682 ) 3,878 
 Commercial mortgage-backed securities 3,407 — ( 678 ) 2,729 
 
 Supranational securities 300 — ( 33 ) 267 
 Other 2 — — 2 
 Total investment securities held to maturity $ 10,239 $ 2 $ ( 1,539 ) $ 8,702 
 Total investment securities $ 44,830 $ 110 $ ( 2,387 ) $ 42,553 

 U.S. Treasury investments include Treasury bills and Notes issued by the U.S. Treasury. Investments in government agency securities represent securities issued by the Small Business Administration (“SBA”), Federal Home Loan Bank (“FHLB”) and other U.S. agencies. Investments in residential and commercial mortgage-backed securities represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Investments in corporate bonds represent positions in debt securities of other financial institutions. Municipal bonds are revenue bonds. Investments in marketable equity securities represent positions in common stock of publicly traded financial institutions. Investments in supranational securities represent securities issued by the Supranational Entities & Multilateral Development Banks. Other held to maturity investments include certificates of deposit with other financial institutions. 
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 BancShares initially held approximately 354,000 shares of Visa, Inc. (“Visa”) Class B common stock (“Visa Class B common stock”). Effective January 24, 2024, all outstanding shares of Visa Class B common stock were redenominated as Visa Class B-1 common stock (“Visa Class B-1 common stock”) pursuant to Visa’s eighth amended and restated certificate of incorporation. BancShares currently holds approximately 354,000 shares of Visa Class B-1 common stock. Until the resolution of certain litigation, at which time the Visa Class B-1 common stock will convert to publicly traded Visa Class A common stock, or the potential exchange of Visa Class B-1 common stock for other marketable classes of Visa common stock, these shares are only transferable to other stockholders of Visa Class B-1 common stock or certain new denominations of Visa’s former Class B common stock. As a result, there is limited transfer activity in private transactions between buyers and sellers. Given this limited trading activity and the continuing uncertainty regarding the likelihood, ultimate timing and eventual exchange of Visa Class B-1 common stock for shares of Visa Class A common stock or other marketable classes of Visa common stock, these shares are not considered to have a readily determinable fair value and have no carrying value. BancShares continues to monitor the trading activity in Visa Class B-1 common stock, the status of the resolution of certain litigation matters at Visa, and other potential exchange alternatives that would trigger the conversion of the Visa Class B-1 common stock into Visa Class A common stock or other marketable classes of Visa common stock. 
 
 Accrued interest receivable for available for sale and held to maturity debt securities was excluded from the estimate for credit losses. At September 30, 2025, accrued interest receivable for available for sale and held to maturity debt securities was $ 172 million and $ 19 million, respectively. At December 31, 2024, accrued interest receivable for available for sale and held to maturity debt securities was $ 177 million and $ 20 million, respectively. During the three and nine months ended September 30, 2025 and 2024, there was no accrued interest that was deemed uncollectible and written off against interest income. 
 
 A security is considered past due once it is 30 days contractually past due under the terms of the agreement. There were no securities past due as of September 30, 2025 or December 31, 2024. 
 
 The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Residential and commercial mortgage-backed and government agency securities are stated separately as they are not due at a single maturity date. 
 
 Maturities - Debt Securities 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Amortized Cost Fair Value Amortized Cost Fair Value 
 Investment securities available for sale 
 Non-amortizing securities maturing in: 
 One year or less $ 9,276 $ 9,295 $ 5,090 $ 5,086 
 After one through five years 4,631 4,662 8,945 8,949 
 After five through 10 years 78 74 346 330 
 After 10 years 17 17 22 22 
 
 Government agency 53 52 79 77 
 Residential mortgage-backed securities 17,550 17,435 16,161 15,620 
 Commercial mortgage-backed securities 3,582 3,428 3,869 3,666 
 
 Total investment securities available for sale $ 35,187 $ 34,963 $ 34,512 $ 33,750 
 Investment securities held to maturity 
 Non-amortizing securities maturing in: 
 One year or less $ 505 $ 500 $ 429 $ 419 
 After one through five years 1,492 1,406 1,299 1,208 
 After five through 10 years 128 116 546 468 
 
 Residential mortgage-backed securities 4,568 4,083 4,558 3,878 
 Commercial mortgage-backed securities 3,358 2,733 3,407 2,729 
 
 Total investment securities held to maturity $ 10,051 $ 8,838 $ 10,239 $ 8,702 
 
 15 

 T he following table presents interest and dividend income on investment securities: 
 
 Interest and Dividends on Investment Securities 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 2025 2024 2025 2024 
 Interest income - taxable investment securities (1) 
 $ 432 $ 357 $ 1,263 $ 967 
 Interest income - nontaxable investment securities 1 — 1 1 
 Dividend income - marketable equity securities — 1 2 2 
 Interest on investment securities $ 433 $ 358 $ 1,266 $ 970 

 (1) Amount includes interest income on securities purchased under agreements to resell. 
 
 The following table presents the gross realized gain and loss on sales of investment securities available for sale, and the net realized gain on sale of marketable equity securities: 
 
 Realized Gain (Loss) on Sale of Investment Securities, Net 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 2025 2024 2025 2024 
 Gross realized gain on sale of investment securities available for sale $ — $ — $ 1 $ — 
 Gross realized loss on sale of investment securities available for sale — — ( 2 ) — 
 Net realized loss on sale of investment securities available for sale — — ( 1 ) — 
 Net realized gain on sale of marketable equity securities 
 — 4 1 4 
 Realized gain on sale of investment securities, net 
 $ — $ 4 $ — $ 4 

 The following table provides information regarding investment securities available for sale with unrealized losses: 
 
 Gross Unrealized Losses on Debt Securities Available For Sale 
 
 dollars in millions September 30, 2025 
 Less than 12 months 12 months or more Total 
 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses 
 Investment securities available for sale 
 U.S. Treasury $ 501 $ ( 1 ) $ 400 $ ( 1 ) $ 901 $ ( 2 ) 
 Government agency — — 52 ( 1 ) 52 ( 1 ) 
 Residential mortgage-backed securities 403 ( 1 ) 3,381 ( 350 ) 3,784 ( 351 ) 
 Commercial mortgage-backed securities 96 — 1,175 ( 181 ) 1,271 ( 181 ) 
 Corporate bonds 1 — 212 ( 6 ) 213 ( 6 ) 
 
 Total $ 1,001 $ ( 2 ) $ 5,220 $ ( 539 ) $ 6,221 $ ( 541 ) 
 
 December 31, 2024 
 Less than 12 months 12 months or more Total 
 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses 
 Investment securities available for sale 
 U.S. Treasury $ 3,791 $ ( 12 ) $ 981 $ ( 15 ) $ 4,772 $ ( 27 ) 
 Government agency — — 77 ( 2 ) 77 ( 2 ) 
 Residential mortgage-backed securities 7,470 ( 61 ) 3,575 ( 521 ) 11,045 ( 582 ) 
 Commercial mortgage-backed securities 1,183 ( 8 ) 1,342 ( 202 ) 2,525 ( 210 ) 
 Corporate bonds 16 — 438 ( 22 ) 454 ( 22 ) 
 
 Total $ 12,460 $ ( 81 ) $ 6,413 $ ( 762 ) $ 18,873 $ ( 843 ) 

 16 

 As of September 30, 2025, there were 461 investment securities available for sale with continuous unrealized losses for more than 12 months, of which 427 were government sponsored enterprise-issued mortgage-backed securities, government agency securities, or U.S. Treasury securities and the remaining 34 were corporate bonds. BancShares has the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Given the consistently strong credit rating of the U.S. Treasury, and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, as of September 30, 2025, no allowance for credit loss was required. For corporate bonds, we analyzed the changes in interest rates relative to when the investment securities were purchased or acquired, and considered other factors including changes in credit ratings, delinquencies, and other macroeconomic factors. As a result of this analysis, we determined that no allowance for credit loss was required for investment securities available for sale as of September 30, 2025. 
 
 BancShares’ portfolio of held to maturity debt securities consists of mortgage-backed securities issued by government agencies and government sponsored entities, U.S. Treasury notes, unsecured bonds issued by government agencies and government sponsored entities, and securities issued by the Supranational Entities & Multilateral Development Banks. Given the consistently strong credit rating of the U.S. Treasury and the Supranational Entities & Multilateral Development Banks, and the long history of no credit losses on debt securities issued by government agencies and government sponsored entities, no allowance for credit loss was required for debt securities held to maturity as of September 30, 2025. 
 
 There were no debt securities on nonaccrual status as of September 30, 2025 or December 31, 2024. 
 
 Investment securities having an aggregate carrying value of $ 6.18 billion at September 30, 2025, and $ 3.94 billion at December 31, 2024, were pledged as collateral to secure public funds on deposit, the Purchase Money Note, certain short-term borrowings, and for other purposes as required by law. 
 
 Certain investments held by BancShares are reported in other assets, including FHLB stock and nonmarketable securities without readily determinable fair values that are recorded at cost, and investments in qualified affordable housing projects, all of which are accounted for under the proportional amortization method (the “PAM”). 
 
 17 

 NOTE 4 — LOANS AND LEASES 
 
 Unless otherwise noted, loans held for sale are not included in the following tables. Leases in the following tables include finance leases, but exclude operating lease equipment. 
 
 Loans by Class 
 dollars in millions September 30, 2025 December 31, 2024 
 Commercial 
 Commercial construction $ 5,926 $ 5,109 
 Owner occupied commercial mortgage 17,232 16,842 
 Non-owner occupied commercial mortgage 15,645 16,194 
 Commercial and industrial 41,172 40,737 
 Leases 2,066 2,014 
 Global fund banking 31,615 27,904 
 Investor dependent 2,772 3,193 
 Total commercial 116,428 111,993 
 Consumer 
 Residential mortgage 23,036 23,152 
 Revolving mortgage 2,794 2,567 
 Consumer auto 1,463 1,523 
 Consumer other 1,037 986 
 Total consumer 28,330 28,228 
 Total loans and leases $ 144,758 $ 140,221 

 Refer to Note 1—Significant Accounting Policies and Basis of Presentation for discussion related to changes in loan classes. 
 
 At September 30, 2025 and December 31, 2024, accrued interest receivable on loans included in other assets was $ 637 million and $ 603 million, respectively, and was excluded from the estimate of credit losses. 
 
 The discount on acquired loans is accreted to interest income over the contractual life of the loan using the effective interest method. Discount accretion income was $ 71 million and $ 230 million for the three and nine months ended September 30, 2025, including $ 6 million and $ 17 million for unfunded commitments, respectively. Discount accretion income was $ 107 million and $ 415 million for the three and nine months ended September 30, 2024, including $ 16 million and $ 71 million for unfunded commitments, respectively. 
 
 The following table presents selected components of the amortized cost of loans, including the unamortized discount on acquired loans. 
 
 Components of Amortized Cost 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Deferred fees, including unamortized costs and unearned fees on non-PCD loans $ ( 89 ) $ ( 91 ) 
 
 Net unamortized discount on acquired loans 
 Non-PCD $ 1,339 $ 1,504 
 PCD 44 94 
 Total net unamortized discount $ 1,383 $ 1,598 

 18 

 The aging and nonaccrual status of the outstanding loans and leases by class at September 30, 2025 and December 31, 2024 are provided in the tables below. Loans and leases less than 30 days past due are considered current, as various grace periods allow borrowers to make payments within a stated period after the due date and remain in compliance with the respective agreement. 
 
 Loans and Leases - Delinquency and Nonaccrual Status (1) (2) 
 
 dollars in millions September 30, 2025 
 Accruing Loans 
 30-59 Days
Past Due 60-89 Days
Past Due 90 Days or
Greater Total
Past Due Current Total Accruing Nonaccrual Loans Total 
 Commercial 
 Commercial construction $ 8 $ 20 $ 19 $ 47 $ 5,870 $ 5,917 $ 9 $ 5,926 
 Owner occupied commercial mortgage 31 21 — 52 17,022 17,074 158 17,232 
 Non-owner occupied commercial mortgage 36 36 142 214 15,066 15,280 365 15,645 
 Commercial and industrial 253 53 40 346 40,250 40,596 576 41,172 
 Leases 30 7 — 37 2,004 2,041 25 2,066 
 Global fund banking — — — — 31,615 31,615 — 31,615 
 Investor dependent 2 1 — 3 2,708 2,711 61 2,772 
 Total commercial 360 138 201 699 114,535 115,234 1,194 116,428 
 Consumer 
 Residential mortgage 116 36 6 158 22,708 22,866 170 23,036 
 Revolving mortgage 16 3 — 19 2,742 2,761 33 2,794 
 Consumer auto 10 2 — 12 1,443 1,455 8 1,463 
 Consumer other 4 3 2 9 1,027 1,036 1 1,037 
 Total consumer 146 44 8 198 27,920 28,118 212 28,330 
 Total loans and leases $ 506 $ 182 $ 209 $ 897 $ 142,455 $ 143,352 $ 1,406 $ 144,758 
 
 December 31, 2024 
 Accruing Loans 
 30-59 Days
Past Due 60-89 Days
Past Due 90 Days or
Greater Total
Past Due Current Total Accruing Nonaccrual Loans Total 
 Commercial 
 Commercial construction $ 21 $ 1 $ 1 $ 23 $ 5,077 $ 5,100 $ 9 $ 5,109 
 Owner occupied commercial mortgage 30 9 2 41 16,739 16,780 62 16,842 
 Non-owner occupied commercial mortgage 43 27 78 148 15,621 15,769 425 16,194 
 Commercial and industrial 170 40 16 226 40,122 40,348 389 40,737 
 Leases 33 11 2 46 1,937 1,983 31 2,014 
 Global fund banking — — — — 27,904 27,904 — 27,904 
 Investor dependent 10 1 — 11 3,095 3,106 87 3,193 
 Total commercial 307 89 99 495 110,495 110,990 1,003 111,993 
 Consumer 
 Residential mortgage 172 27 7 206 22,798 23,004 148 23,152 
 Revolving mortgage 20 4 — 24 2,519 2,543 24 2,567 
 Consumer auto 12 3 — 15 1,500 1,515 8 1,523 
 Consumer other 5 3 3 11 974 985 1 986 
 Total consumer 209 37 10 256 27,791 28,047 181 28,228 
 Total loans and leases $ 516 $ 126 $ 109 $ 751 $ 138,286 $ 139,037 $ 1,184 $ 140,221 

 (1) Accrued interest that was reversed when the loan went to nonaccrual status was $ 14 million for the nine months ended September 30, 2025 and $ 14 million for the year ended December 31, 2024. 
 (2) Nonaccrual loans for which there was no related ALLL totaled $ 411 million at September 30, 2025 and $ 303 million at December 31, 2024. 
 
 Other real estate owned (“OREO”) and repossessed assets were $ 98 million as of September 30, 2025 and $ 64 million as of December 31, 2024. 
 
 19 

 Credit Quality Indicators 
 Loans and leases are monitored for credit quality on a recurring basis. Commercial loans and leases and consumer loans have different credit quality indicators as a result of the unique characteristics of the loan classes being evaluated. The credit quality indicators for commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on criticized loans. The indicators as of the date presented are based on the most recent assessment performed and are defined below: 
 
 Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification. 
 
 Special mention – A special mention asset has potential weaknesses which deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification. 
 
 Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected. 
 
 Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values. 
 
 Loss – Assets classified as loss are considered uncollectible and of such little value it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future. 
 
 Ungraded – Ungraded loans represent loans not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at September 30, 2025 and December 31, 2024, relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit. 
 
 The credit quality indicator for consumer loans is based on delinquency status of the borrower as of the date presented. As the borrower becomes more delinquent, the likelihood of loss increases. An exemption is applied to government guaranteed loans as the principal repayments are insured by the Federal Housing Administration and U.S. Department of Veterans Affairs and thus remain on accrual status regardless of delinquency status. 
 
 The following tables summarize the commercial loans disaggregated by year of origination and by risk rating. The consumer loan delinquency status by year of origination is also presented below. The tables reflect the amortized cost of the loans and include purchased credit deteriorated (“PCD”) loans. 
 
 20 

 Commercial Loans - Risk Classifications by Class 
 
 September 30, 2025 
 Risk Classification: Term Loans by Origination Year Revolving Converted to Term Loans 
 dollars in millions 2025 2024 2023 2022 2021 2020 & Prior Revolving Total 
 Commercial construction 
 Pass $ 1,488 $ 1,672 $ 1,453 $ 590 $ 84 $ 79 $ 362 $ — $ 5,728 
 Special Mention 7 4 56 — — — — — 67 
 Substandard 5 15 4 85 15 4 — — 128 
 Doubtful 3 — — — — — — — 3 
 Ungraded — — — — — — — — — 
 Total commercial construction 1,503 1,691 1,513 675 99 83 362 — 5,926 
 Owner occupied commercial mortgage 
 Pass 1,806 2,703 2,345 2,463 2,355 4,253 215 28 16,168 
 Special Mention 47 32 47 106 40 51 2 — 325 
 Substandard 39 59 115 187 94 221 9 1 725 
 Doubtful — 4 10 — — — — — 14 
 Ungraded — — — — — — — — — 
 Total owner occupied commercial mortgage 1,892 2,798 2,517 2,756 2,489 4,525 226 29 17,232 
 Non-owner occupied commercial mortgage 
 Pass 1,977 2,606 3,235 2,241 1,375 2,575 93 3 14,105 
 Special Mention 128 53 114 51 1 24 — — 371 
 Substandard 354 243 141 107 35 199 1 — 1,080 
 Doubtful 42 21 — 15 — 11 — — 89 
 Ungraded — — — — — — — — — 
 Total non-owner occupied commercial mortgage 2,501 2,923 3,490 2,414 1,411 2,809 94 3 15,645 
 Commercial and industrial 
 Pass 9,018 8,274 4,151 3,307 1,717 1,803 9,082 75 37,427 
 Special Mention 188 234 105 122 193 47 116 — 1,005 
 Substandard 410 207 387 454 316 58 502 4 2,338 
 Doubtful 10 11 31 80 10 1 108 — 251 
 Ungraded — — — — — — 151 — 151 
 Total commercial and industrial 9,626 8,726 4,674 3,963 2,236 1,909 9,959 79 41,172 
 Leases 
 Pass 620 591 375 179 79 62 — — 1,906 
 Special Mention 14 16 13 20 2 — — — 65 
 Substandard 19 22 19 9 7 10 — — 86 
 Doubtful 2 2 2 2 1 — — — 9 
 Ungraded — — — — — — — — — 
 Total leases 655 631 409 210 89 72 — — 2,066 
 Global fund banking 
 Pass 983 778 57 104 11 16 29,516 148 31,613 
 Special Mention — 1 — — — — — — 1 
 Substandard — — — — — — 1 — 1 
 Doubtful — — — — — — — — — 
 Ungraded — — — — — — — — — 
 Total global fund banking 983 779 57 104 11 16 29,517 148 31,615 
 Investor dependent 
 Pass 798 776 183 108 — — 290 — 2,155 
 Special Mention 1 48 7 5 — — 1 — 62 
 Substandard 65 190 140 46 7 — 47 — 495 
 Doubtful 10 24 16 6 — — 4 — 60 
 Ungraded — — — — — — — — — 
 Total investor dependent 874 1,038 346 165 7 — 342 — 2,772 
 Total commercial $ 18,034 $ 18,586 $ 13,006 $ 10,287 $ 6,342 $ 9,414 $ 40,500 $ 259 $ 116,428 

 21 

 Consumer Loans - Delinquency Status by Class 
 
 September 30, 2025 
 Days Past Due: Term Loans by Origination Year Revolving Converted to Term Loans 
 dollars in millions 2025 2024 2023 2022 2021 2020 & Prior Revolving Total 
 Residential mortgage 
 Current $ 1,558 $ 2,219 $ 2,671 $ 4,912 $ 4,815 $ 6,574 $ 5 $ — $ 22,754 
 30-59 days 1 5 15 18 14 81 — — 134 
 60-89 days 1 2 2 7 4 39 — — 55 
 90 days or greater — 1 5 8 8 71 — — 93 
 Total residential mortgage 1,560 2,227 2,693 4,945 4,841 6,765 5 — 23,036 
 Revolving mortgage 
 Current — — — — — — 2,629 125 2,754 
 30-59 days — — — — — — 11 9 20 
 60-89 days — — — — — — 1 5 6 
 90 days or greater — — — — — — 3 11 14 
 Total revolving mortgage — — — — — — 2,644 150 2,794 
 Consumer auto 
 Current 422 454 248 183 94 45 — — 1,446 
 30-59 days 1 3 3 3 1 1 — — 12 
 60-89 days — 1 1 1 — — — — 3 
 90 days or greater — 1 1 — — — — — 2 
 Total consumer auto 423 459 253 187 95 46 — — 1,463 
 Consumer other 
 Current 89 112 92 55 18 8 655 — 1,029 
 30-59 days — — — — — — 3 — 3 
 60-89 days — — — — — — 2 — 2 
 90 days or greater — — — — — — 3 — 3 
 Total consumer other 89 112 92 55 18 8 663 — 1,037 
 Total consumer $ 2,072 $ 2,798 $ 3,038 $ 5,187 $ 4,954 $ 6,819 $ 3,312 $ 150 $ 28,330 

 22 

 The following tables represent current credit quality indicators by origination year as of December 31, 2024: 
 
 Commercial Loans - Risk Classifications by Class 
 
 December 31, 2024 
 Risk Classification: Term Loans by Origination Year Revolving Converted to Term Loans 
 dollars in millions 2024 2023 2022 2021 2020 2019 & Prior Revolving Total 
 Commercial construction 
 Pass $ 1,095 $ 1,854 $ 1,276 $ 287 $ 152 $ 52 $ 148 $ — $ 4,864 
 Special Mention — 80 35 — 7 24 — — 146 
 Substandard — 8 47 20 7 17 — — 99 
 Doubtful — — — — — — — — — 
 Ungraded — — — — — — — — — 
 Total commercial construction 1,095 1,942 1,358 307 166 93 148 — 5,109 
 Owner occupied commercial mortgage 
 Pass 2,721 2,445 2,747 2,581 2,199 2,988 223 29 15,933 
 Special Mention 22 46 70 58 32 61 9 — 298 
 Substandard 30 34 136 82 73 245 10 1 611 
 Doubtful — — — — — — — — — 
 Ungraded — — — — — — — — — 
 Total owner occupied commercial mortgage 2,773 2,525 2,953 2,721 2,304 3,294 242 30 16,842 
 Non-owner occupied commercial mortgage 
 Pass 2,879 3,082 2,744 2,041 1,598 2,134 119 3 14,600 
 Special Mention — 66 293 43 4 86 — — 492 
 Substandard 12 15 171 39 116 653 — — 1,006 
 Doubtful — — — — 20 76 — — 96 
 Ungraded — — — — — — — — — 
 Total non-owner occupied commercial mortgage 2,891 3,163 3,208 2,123 1,738 2,949 119 3 16,194 
 Commercial and industrial 
 Pass 11,813 6,295 4,622 2,389 1,221 1,408 9,033 67 36,848 
 Special Mention 145 236 255 302 29 69 203 — 1,239 
 Substandard 155 347 614 332 195 207 454 4 2,308 
 Doubtful 5 23 42 15 1 18 103 — 207 
 Ungraded — — — — — — 135 — 135 
 Total commercial and industrial 12,118 6,901 5,533 3,038 1,446 1,702 9,928 71 40,737 
 Leases 
 Pass 739 506 300 147 96 46 — — 1,834 
 Special Mention 13 17 29 5 4 — — — 68 
 Substandard 21 29 23 13 9 8 — — 103 
 Doubtful 1 3 2 2 1 — — — 9 
 Ungraded — — — — — — — — — 
 Total leases 774 555 354 167 110 54 — — 2,014 
 Global fund banking 
 Pass 892 179 147 20 14 12 26,588 36 27,888 
 Special Mention — — — — — — — — — 
 Substandard — — 5 8 2 — 1 — 16 
 Doubtful — — — — — — — — — 
 Ungraded — — — — — — — — — 
 Total global fund banking 892 179 152 28 16 12 26,589 36 27,904 
 Investor dependent 
 Pass 1,135 640 352 37 — — 315 3 2,482 
 Special Mention 17 28 6 — — — 26 — 77 
 Substandard 122 173 164 31 1 — 61 — 552 
 Doubtful 26 19 28 5 — — 4 — 82 
 Ungraded — — — — — — — — — 
 Total investor dependent 1,300 860 550 73 1 — 406 3 3,193 
 Total commercial $ 21,843 $ 16,125 $ 14,108 $ 8,457 $ 5,781 $ 8,104 $ 37,432 $ 143 $ 111,993 

 23 

 Consumer Loans - Delinquency Status by Class 
 
 December 31, 2024 
 Days Past Due: Term Loans by Origination Year Revolving Converted to Term Loans 
 dollars in millions 2024 2023 2022 2021 2020 2019 & Prior Revolving Total 
 Residential mortgage 
 Current $ 2,178 $ 2,968 $ 5,264 $ 5,148 $ 2,913 $ 4,353 $ 4 $ — $ 22,828 
 30-59 days 3 13 19 23 31 95 — — 184 
 60-89 days 1 3 5 2 2 28 — — 41 
 90 days or greater — 4 6 7 9 73 — — 99 
 Total residential mortgage 2,182 2,988 5,294 5,180 2,955 4,549 4 — 23,152 
 Revolving mortgage 
 Current — — — — — — 2,420 108 2,528 
 30-59 days — — — — — — 16 6 22 
 60-89 days — — — — — — 1 5 6 
 90 days or greater — — — — — — 3 8 11 
 Total revolving mortgage — — — — — — 2,440 127 2,567 
 Consumer auto 
 Current 617 358 277 155 68 27 — — 1,502 
 30-59 days 3 3 3 2 1 1 — — 13 
 60-89 days 1 1 1 1 — — — — 4 
 90 days or greater 1 1 1 1 — — — — 4 
 Total consumer auto 622 363 282 159 69 28 — — 1,523 
 Consumer other 
 Current 147 144 99 30 6 18 531 — 975 
 30-59 days 1 — — — — 1 3 — 5 
 60-89 days — — 1 — — — 2 — 3 
 90 days or greater — — — — — 1 2 — 3 
 Total consumer other 148 144 100 30 6 20 538 — 986 
 Total consumer $ 2,952 $ 3,495 $ 5,676 $ 5,369 $ 3,030 $ 4,597 $ 2,982 $ 127 $ 28,228 

 24 

 Gross Charge-offs 
 
 Gross charge-off disclosures by origination year and loan class are summarized in the following tables: 
 
 Nine Months Ended September 30, 2025 
 Term Loans by Origination Year Revolving Converted to Term Loans 
 dollars in millions 2025 2024 2023 2022 2021 2020 & Prior Revolving Total 
 Commercial 
 Commercial construction $ — $ — $ — $ 1 $ — $ — $ — $ — $ 1 
 Owner occupied commercial mortgage — 2 — — — 1 — — 3 
 Non-owner occupied commercial mortgage 4 23 3 20 — 32 — — 82 
 Commercial and industrial 28 20 51 44 9 3 191 1 347 
 Leases 2 3 3 3 1 3 — — 15 
 
 Investor dependent — 14 30 28 7 4 9 — 92 
 Total commercial 34 62 87 96 17 43 200 1 540 
 Consumer 
 Residential mortgage — — — — — 6 — — 6 
 
 Consumer auto — 2 2 1 1 — — — 6 
 Consumer other — 1 1 1 — — 12 — 15 
 Total consumer — 3 3 2 1 6 12 — 27 
 Total loans and leases $ 34 $ 65 $ 90 $ 98 $ 18 $ 49 $ 212 $ 1 $ 567 

 Nine Months Ended September 30, 2024 
 Term Loans by Origination Year Revolving Converted to Term Loans 
 dollars in millions 2024 2023 2022 2021 2020 2019 & Prior Revolving Total 
 Commercial 
 
 Owner occupied commercial mortgage $ — $ — $ — $ — $ — $ 8 $ — $ — $ 8 
 Non-owner occupied commercial mortgage — — — — 19 70 — — 89 
 Commercial and industrial 8 35 65 15 4 10 50 1 188 
 Leases 1 4 4 4 2 2 — — 17 
 
 Investor dependent — 37 63 27 3 4 7 — 141 
 Total commercial 9 76 132 46 28 94 57 1 443 
 Consumer 
 Residential mortgage — — — — — 1 — — 1 
 
 Consumer auto — 2 1 1 — — — — 4 
 Consumer other — 1 1 1 — 1 12 — 16 
 Total consumer — 3 2 2 — 2 12 — 21 
 Total loans and leases $ 9 $ 79 $ 134 $ 48 $ 28 $ 96 $ 69 $ 1 $ 464 

 25 

 Loan Modifications for Borrowers Experiencing Financial Difficulties 
 As part of BancShares’ ongoing credit risk management practices, BancShares attempts to work with borrowers when necessary to extend or modify loan terms to better align with the borrowers’ current ability to repay. BancShares’ modifications granted to debtors experiencing financial difficulties typically take the form of term extensions, interest rate reductions, payment delays, principal forgiveness, or a combination thereof. Modifications are made in accordance with internal policies and guidelines to conform to regulatory guidance. 
 
 The following tables present the amortized cost of loan modifications made to debtors experiencing financial difficulty, disaggregated by class and type of loan modification. The tables also provide financial effects by type of such loan modifications for the respective loan class. Loan modifications for principal forgiveness round to less than $ 1 million for all loan classes in all periods presented and are not presented in the following tables. 
 
 Amortized Cost of Loans Modified during the three months ended September 30, 2025 
 
 dollars in millions Term Extension (1) 
 Payment Delay Interest Rate Reduction Term Extension (1) and Interest Rate Reduction 
 Term Extension (1) and Payment Delay 
 Other Combinations (2) 
 Total Percent of Total Loan Class 
 Commercial 
 Commercial construction $ 8 $ — $ — $ — $ 7 $ — $ 15 0.24 % 
 Owner occupied commercial mortgage 8 3 — — — — 11 0.07 
 Non-owner occupied commercial mortgage 61 9 — 45 — — 115 0.74 
 Commercial and industrial 233 48 — 14 4 1 300 0.73 
 
 Investor dependent 9 40 — — 4 — 53 1.92 
 Total commercial 319 100 — 59 15 1 494 0.42 
 Consumer 
 Residential mortgage 7 — 1 — 2 — 10 0.04 
 
 Total consumer 7 — 1 — 2 — 10 0.04 
 Total loans and leases $ 326 $ 100 $ 1 $ 59 $ 17 $ 1 $ 504 0.35 % 

 (1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended. 
 (2) Consists of $ 1 million of commercial and industrial loans modified with a term extension, payment delay, and interest rate reduction. 
 
 Amortized Cost of Loans Modified during the three months ended September 30, 2024 
 
 dollars in millions Term Extension (1) 
 Payment Delay Interest Rate Reduction Term Extension (1) and Interest Rate Reduction 
 Term Extension (1) and Payment Delay 
 Total Percent of Total Loan Class 
 Commercial 
 
 Owner occupied commercial mortgage $ 15 $ 1 $ — $ 8 $ — $ 24 0.15 % 
 Non-owner occupied commercial mortgage 30 6 — — — 36 0.22 
 Commercial and industrial 140 — — 3 1 144 0.36 
 
 Investor dependent 6 34 — — 8 48 1.37 
 Total commercial 191 41 — 11 9 252 0.23 
 Consumer 
 Residential mortgage 1 — — 1 — 2 0.01 
 Revolving mortgage 1 — — — — 1 0.05 
 
 Total consumer 2 — — 1 — 3 0.01 
 Total loans and leases $ 193 $ 41 $ — $ 12 $ 9 $ 255 0.18 % 

 (1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended. 
 
 26 

 Financial Effects of Loan Modifications made during the three months ended September 30, 2025 
 
 dollars in millions Weighted Average Term Extension (in Months) Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in Months) 
 Commercial 
 Commercial construction 8 — % 7 
 Owner occupied commercial mortgage 13 — 6 
 Non-owner occupied commercial mortgage 9 0.52 36 
 Commercial and industrial 15 1.05 12 
 Leases 60 — — 
 
 Investor dependent 11 — 6 
 Total commercial 13 0.65 11 
 Consumer 
 Residential mortgage 21 1.52 8 
 Revolving mortgage 58 4.36 — 
 Consumer auto 18 — — 
 Consumer other 60 11.41 — 
 Total consumer 24 3.01 8 
 Total loans and leases 13 0.71 % 11 

 Financial Effects of Loan Modifications made during the three months ended September 30, 2024 
 
 dollars in millions Weighted Average Term Extension (in Months) Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in Months) 
 Commercial 
 Commercial construction 36 0.60 % — 
 Owner occupied commercial mortgage 17 1.82 6 
 Non-owner occupied commercial mortgage 7 — 6 
 Commercial and industrial 15 2.61 6 
 Leases 11 — — 
 
 Investor dependent 9 — 6 
 Total commercial 14 2.03 6 
 Consumer 
 Residential mortgage 47 2.07 11 
 Revolving mortgage 60 5.42 — 
 Consumer auto 31 — — 
 Consumer other 60 10.54 — 
 Total consumer 52 3.29 11 
 Total loans and leases 14 2.19 % 6 

 Note: The financial effects of loan modifications for certain loan classes reported in the tables above were not reported in the preceding tables as the total amortized cost of loans modified during the period for such loan classes rounded to less than $ 1 million. 
 
 27 

 Amortized Cost of Loans Modified during the nine months ended September 30, 2025 
 
 dollars in millions Term Extension (1) 
 Payment Delay Interest Rate Reduction Term Extension (1) and Interest Rate Reduction 
 Term Extension (1) and Payment Delay 
 Other Combinations (2) 
 Total Percent of Total Loan Class 
 Commercial 
 Commercial construction $ 8 $ — $ — $ — $ 15 $ — $ 23 0.38 % 
 Owner occupied commercial mortgage 11 5 — 29 22 — 67 0.39 
 Non-owner occupied commercial mortgage 120 9 — 109 23 — 261 1.67 
 Commercial and industrial 267 124 — 16 13 6 426 1.03 
 
 Investor dependent 15 59 — — 10 — 84 3.04 
 Total commercial 421 197 — 154 83 6 861 0.74 
 Consumer 
 Residential mortgage 15 — 1 2 25 — 43 0.18 
 Revolving mortgage 1 — — 1 — — 2 0.07 
 
 Total consumer 16 — 1 3 25 — 45 0.16 
 Total loans and leases $ 437 $ 197 $ 1 $ 157 $ 108 $ 6 $ 906 0.63 % 

 (1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended. 
 (2) Consists of $ 6 million of commercial and industrial loans modified with a term extension, payment delay, and interest rate reduction. 
 
 Amortized Cost of Loans Modified during the nine months ended September 30, 2024 
 
 dollars in millions Term Extension (1) 
 Payment Delay Interest Rate Reduction Term Extension (1) and Interest Rate Reduction 
 Term Extension (1) and Payment Delay 
 Other Combinations (2) 
 Total Percent of Total Loan Class 
 Commercial 
 Commercial construction $ 3 $ — $ — $ — $ — $ — $ 3 0.06 % 
 Owner occupied commercial mortgage 36 1 4 9 9 — 59 0.36 
 Non-owner occupied commercial mortgage 108 6 — — 26 — 140 0.88 
 Commercial and industrial 191 91 31 12 1 — 326 0.81 
 
 Investor dependent 7 78 — — 33 1 119 3.32 
 Total commercial 345 176 35 21 69 1 647 0.59 
 Consumer 
 Residential mortgage 7 — — 1 — — 8 0.04 
 Revolving mortgage 4 — — 1 — — 5 0.20 
 
 Total consumer 11 — — 2 — — 13 0.05 
 Total loans and leases $ 356 $ 176 $ 35 $ 23 $ 69 $ 1 $ 660 0.48 % 

 (1) Term extensions include modifications in which the balloon principal payment was deferred to a later date or the loan amortization period was extended. 
 (2) Consists of $ 1 million of investor dependent loans modified with a term extension, interest rate reduction, and payment delay. 
 
 28 

 Financial Effects of Loan Modifications made during the nine months ended September 30, 2025 
 
 Weighted Average Term Extension (in Months) Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in Months) 
 Commercial 
 Commercial construction 7 — % 6 
 Owner occupied commercial mortgage 11 1.93 5 
 Non-owner occupied commercial mortgage 17 0.56 14 
 Commercial and industrial 14 1.31 12 
 Leases 60 — — 
 
 Investor dependent 9 — 7 
 Total commercial 15 0.91 10 
 Consumer 
 Residential mortgage 14 1.21 6 
 Revolving mortgage 48 4.04 5 
 Consumer auto 19 — — 
 Consumer other 60 9.93 — 
 Total consumer 16 2.39 6 
 Total loans and leases 15 0.95 % 10 

 Financial Effects of Loan Modifications made during the nine months ended September 30, 2024 
 
 Weighted Average Term Extension (in Months) Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in Months) 
 Commercial 
 Commercial construction 15 0.60 % — 
 Owner occupied commercial mortgage 28 1.67 18 
 Non-owner occupied commercial mortgage 20 — 40 
 Commercial and industrial 15 0.71 12 
 Leases 11 — 6 
 
 Investor dependent 11 2.75 8 
 Total commercial 18 0.96 14 
 Consumer 
 Residential mortgage 70 2.09 11 
 Revolving mortgage 60 4.73 — 
 Consumer auto 29 0.26 — 
 Consumer other 57 9.65 — 
 Total consumer 66 3.41 11 
 Total loans and leases 19 1.07 % 14 

 Note: The financial effects of loan modifications for certain loan classes reported in the tables above were not reported in the preceding tables as the total amortized cost of loans modified during the period for such loan classes rounded to less than $ 1 million. 
 
 Borrowers experiencing financial difficulties are typically identified in our credit risk management process before loan modifications occur. An assessment of whether a borrower is experiencing financial difficulty is reassessed or performed on the date of a modification. Since the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ALLL because of the measurement methodologies used to estimate the ALLL, a change to the ALLL is generally not recorded upon modification. Upon BancShares’ determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. 
 
 At September 30, 2025, there were $ 113 million of loans modified in the twelve months ended September 30, 2025, which defaulted subsequent to modification. 
 29 

 The following tables present the amortized cost and performance of loans to borrowers experiencing financial difficulties for which the terms of the loan were modified during the referenced periods. The period of delinquency is based on the number of days the scheduled payment is contractually past due. 
 
 Modified Loans Payment Status (twelve months ended September 30, 2025) 
 
 dollars in millions Current 30–59 Days Past Due 60–89 Days Past Due 90 Days or Greater Past Due Total 
 Commercial 
 Commercial construction $ 22 $ 1 $ — $ — $ 23 
 Owner occupied commercial mortgage 74 1 — 9 84 
 Non-owner occupied commercial mortgage 241 4 1 60 306 
 Commercial and industrial 404 2 1 24 431 
 
 Investor dependent 90 — — 1 91 
 Total commercial 831 8 2 94 935 
 Consumer 
 Residential mortgage 35 3 3 6 47 
 Revolving mortgage 7 — — — 7 
 
 Total consumer 42 3 3 6 54 
 Total loans and leases $ 873 $ 11 $ 5 $ 100 $ 989 

 Modified Loans Payment Status (twelve months ended September 30, 2024) 
 
 dollars in millions Current 30–59 Days Past Due 60–89 Days Past Due 90 Days or Greater Past Due Total 
 Commercial 
 Commercial construction $ 3 $ — $ — $ — $ 3 
 Owner occupied commercial mortgage 50 — 9 2 61 
 Non-owner occupied commercial mortgage 156 1 — 16 173 
 Commercial and industrial 346 1 — 2 349 
 
 Investor dependent 127 — — 1 128 
 Total commercial 682 2 9 21 714 
 Consumer 
 Residential mortgage 9 1 2 4 16 
 Revolving mortgage 6 — — — 6 
 
 Total consumer 15 1 2 4 22 
 Total loans and leases $ 697 $ 3 $ 11 $ 25 $ 736 

 At September 30, 2025, there were $ 17 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the nine months ended September 30, 2025. At December 31, 2024, there were $ 55 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified during the year ended December 31, 2024 . 
 
 30 

 Loans Pledged 
 
 The following table provides information regarding loans pledged as collateral for borrowing capacity through the FHLB of Atlanta, the Federal Reserve Bank (“FRB”) and FDIC. 
 
 Loans Pledged 
 
 dollars in millions September 30, 2025 December 31, 2024 
 FHLB of Atlanta 
 Lendable collateral value of pledged non-PCD loans $ 19,472 $ 17,873 
 Less: advances — — 
 Less: letters of credit 1,450 1,450 
 Available borrowing capacity $ 18,022 $ 16,423 
 Pledged non-PCD loans $ 31,945 $ 30,421 
 
 FRB 
 Lendable collateral value of pledged non-PCD loans $ 13,328 $ 5,475 
 Less: advances — — 
 Available borrowing capacity $ 13,328 $ 5,475 
 Pledged non-PCD loans $ 13,804 $ 6,309 
 
 FDIC 
 Lendable collateral value of pledged loans $ 36,228 $ 41,282 
 Less: advances — — 
 Less: Purchase Money Note 35,991 35,991 
 Available borrowing capacity (1) 
 $ — $ 5,291 
 Pledged loans (1) 
 $ 34,860 $ 41,040 

 (1) The draw period ended on March 27, 2025, therefore there is no available borrowing capacity at September 30, 2025. Loans remain pledged as collateral for the Purchase Money Note. 
 
 As a member of the FHLB, FCB can access financing based on an evaluation of its creditworthiness, statement of financial position, size and eligibility of collateral. FCB may at any time grant a security interest in, sell, convey or otherwise dispose of any of the assets used for collateral, provided that FCB is in compliance with the collateral maintenance requirement immediately following such disposition. There were no outstanding advances from the FHLB at September 30, 2025 or December 31, 2024. 
 
 Under borrowing arrangements with the FRB, BancShares has access to the FRB Discount Window on a secured basis. There were no outstanding borrowings with the FRB Discount Window at September 30, 2025 or December 31, 2024. 
 
 In connection with the SVBB Acquisition, FCB and the FDIC entered into financing agreements, including the five-year Purchase Money Note, and the Advance Facility Agreement, which allowed for advances through March 27, 2025. There were no amounts outstanding at the end of the draw period of the facility on March 27, 2025. Refer to Note 2—Business Combinations for further discussion of these agreements and Note 9—Borrowings for the outstanding carrying value of the Purchase Money Note. 
 
 31 

 NOTE 5 — ALLOWANCE FOR LOAN AND LEASE LOSSES 
 
 The ALLL is reported as a separate line item on the Consolidated Balance Sheets, while the reserve for off-balance sheet credit exposure is included in other liabilities. The provision or benefit for credit losses related to (i) loans and leases (ii) off-balance sheet credit exposure, and (iii) investment securities available for sale, if any, is reported in the Consolidated Statements of Income as provision or benefit for credit losses. 
 
 The ALLL activity for loans and leases is summarized in the following table: 
 
 Allowance for Loan and Lease Losses 
 dollars in millions Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 
 Commercial Consumer Total Commercial Consumer Total 
 Balance at beginning of period $ 1,512 $ 160 $ 1,672 $ 1,547 $ 153 $ 1,700 
 
 Provision (benefit) for loan and lease losses 
 238 ( 24 ) 214 123 — 123 
 
 Charge-offs 
 ( 244 ) ( 12 ) ( 256 ) ( 169 ) ( 8 ) ( 177 ) 
 Recoveries 18 4 22 27 5 32 
 Balance at end of period $ 1,524 $ 128 $ 1,652 $ 1,528 $ 150 $ 1,678 

 Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 
 Commercial Consumer Total Commercial Consumer Total 
 Balance at beginning of period $ 1,518 $ 158 $ 1,676 $ 1,581 $ 166 $ 1,747 
 
 Provision (benefit) for loan and lease losses 
 487 ( 14 ) 473 316 ( 5 ) 311 
 
 Charge-offs 
 ( 540 ) ( 27 ) ( 567 ) ( 443 ) ( 21 ) ( 464 ) 
 Recoveries 59 11 70 74 10 84 
 Balance at end of period $ 1,524 $ 128 $ 1,652 $ 1,528 $ 150 $ 1,678 
 
 The decrease of $ 20 million in the ALLL at September 30, 2025 compared to June 30, 2025 primarily reflects improvements in the economic outlook and other changes, including the elimination of reserves related to Hurricane Helene, partially offset by higher specific reserves for individually evaluated loans, and growth in global fund banking loans which have a lower loss rate relative to our other portfolios. Also, during the three months ended September 30, 2025, we updated our PD, LGD, and exposure at default methodology for certain portfolios which contributed to changes in the ALLL compared to prior periods. 
 
 The decrease of $ 24 million in the ALLL at September 30, 2025 compared to December 31, 2024 was also mainly due to the changes discussed above. 
 
 The following table presents the components of the provision for credit losses: 
 
 Provision for Credit Losses 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 2025 2024 2025 2024 
 
 Provision for loan and lease losses 
 $ 214 $ 123 $ 473 $ 311 
 
 Benefit for off-balance sheet credit exposure ( 23 ) ( 6 ) ( 13 ) ( 35 ) 
 
 Provision for credit losses $ 191 $ 117 $ 460 $ 276 

 32 

 NOTE 6 — LEASES 
 
 Lessee 
 BancShares’ leases primarily include administrative offices and bank locations. Substantially all of our operating lease liabilities relate to United States real estate leases. Our finance lease liabilities relate to equipment leases, including the lease of certain ATMs. Our real estate leases have remaining lease terms of up to 32 years. Our lease terms may include options to extend or terminate the lease, and our operating leases have renewal terms that can extend from 1 to 25 years. The options are included in the lease term when it is determined that it is reasonably certain the option will be exercised. 
 
 The following table presents supplemental balance sheet information and remaining weighted average lease terms and discount rates: 
 
 Supplemental Lease Information 
 
 dollars in millions Classification September 30, 2025 December 31, 2024 
 Lease assets: 
 Operating lease ROU assets Other assets $ 305 $ 316 
 Finance leases Premises and equipment 67 15 
 Total lease assets $ 372 $ 331 
 Lease liabilities: 
 Operating leases Other liabilities $ 342 $ 357 
 Finance leases Other borrowings 67 15 
 Total lease liabilities $ 409 $ 372 
 Weighted-average remaining lease terms: 
 Operating leases 7.3 years 7.4 years 
 Finance leases 8.1 years 11.7 years 
 Weighted-average discount rate: 
 Operating leases 3.10 % 2.94 % 
 Finance leases 4.20 3.96 

 As of September 30, 2025, there were no leases that have not yet commenced that would have a material impact on BancShares’ consolidated financial statements. 
 
 The following table presents components of lease cost: 
 
 Components of Net Lease Cost 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 Classification 2025 2024 2025 2024 
 Operating lease cost 
 Occupancy expense $ 18 $ 19 $ 54 $ 56 
 
 Finance lease ROU asset amortization Equipment expense 3 — 6 1 
 Interest on lease liabilities Interest expense - other borrowings 1 — 2 — 
 Variable lease cost (1) 
 Occupancy expense 4 7 16 22 
 Sublease income Occupancy expense ( 1 ) ( 1 ) ( 4 ) ( 4 ) 
 Net lease cost (1) 
 $ 25 $ 25 $ 74 $ 75 

 (1) Includes short-term lease cost. 
 
 Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term. 
 
 For finance leases, the right of use (“ROU”) asset is amortized straight-line over the lease term as equipment expense and interest on the lease liability is recognized separately. 
 
 Variable lease cost includes common area maintenance, property taxes, utilities, and other operating expenses related to leased premises recognized in the period in which the expense was incurred. Certain of our lease agreements also include rental payments adjusted periodically for inflation. While lease liabilities are not remeasured because of these changes, these adjustments are treated as variable lease costs and recognized in the period in which the expense is incurred. 
 
 Sublease income results from leasing excess building space that BancShares is no longer utilizing under operating leases, which have remaining lease terms of up to 11 years. 
 
 33 

 The following table presents supplemental cash flow information related to leases: 
 
 Supplemental Cash Flow Information 
 
 dollars in millions Nine Months Ended September 30, 
 2025 2024 
 Cash paid for amounts included in the measurement of lease liabilities: 
 Operating cash flows from operating leases $ 58 $ 57 
 Operating cash flows from finance leases 2 — 
 Financing cash flows from finance leases 5 1 
 ROU assets obtained in exchange for new operating lease liabilities 44 26 
 ROU assets obtained in exchange for new finance lease liabilities 55 — 

 Lessor 
 BancShares leases equipment to commercial end-users under operating lease and finance lease arrangements. The majority of operating lease equipment is long-lived rail equipment, which is typically leased several times over its life. We also lease technology and office equipment, and large and small industrial, medical, and transportation equipment under both operating leases and finance leases. 
 
 Our Rail operating leases typically do not include purchase options. Many of our finance leases, and other equipment operating leases, offer the lessee the option to purchase the equipment at fair market value or for a nominal fixed purchase option. Many of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond the initial contractual term. Our leases typically do not include early termination options. Continued rent payments are due if leased equipment is not returned at the end of the lease. 
 
 The table that follows presents lease income related to BancShares’ operating and finance leases: 
 
 Lease Income 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 2025 2024 2025 2024 
 Lease income – operating leases $ 261 $ 236 $ 772 $ 714 
 Variable lease income – operating leases (1) 
 12 26 43 62 
 Rental income on operating leases 273 262 815 776 
 Interest income – sales type and direct financing leases 44 44 131 131 
 Variable lease income included in other noninterest income (2) 
 14 15 44 46 
 Interest income – leveraged leases 1 1 3 3 
 Total lease income $ 332 $ 322 $ 993 $ 956 

 (1) Primarily includes per diem railcar operating lease rental income earned on a time or mileage usage basis. 
 (2) Includes revenue related to insurance coverage on leased equipment and leased equipment property tax reimbursements due from customers. 
 
 NOTE 7 — GOODWILL AND CORE DEPOSIT INTANGIBLES 
 
 Goodwill 
 BancShares had goodwill of $ 346 million at September 30, 2025 and December 31, 2024. There was no goodwill impairment during the nine months ended September 30, 2025 or 2024. Goodwill relates to the General Bank reporting segment. 
 
 Core Deposit Intangibles 
 Core deposit intangibles represent the estimated fair value of core deposits and other customer relationships acquired. Core deposit intangibles are being amortized over their estimated useful lives. The following tables summarize the activity for core deposit intangibles: 
 
 Core Deposit Intangibles 
 
 Nine Months Ended September 30, 
 dollars in millions 2025 
 Balance at beginning of period, net of accumulated amortization $ 249 
 
 Less: amortization for the period 41 
 Balance at end of period, net of accumulated amortization $ 208 

 34 

 The following table summarizes the accumulated amortization balance for core deposit intangibles: 
 
 Core Deposit Intangible Accumulated Amortization 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Gross balance $ 501 $ 501 
 Less: accumulated amortization 293 252 
 Balance, net of accumulated amortization $ 208 $ 249 

 The following table summarizes the expected amortization expense as of September 30, 2025 in subsequent periods for core deposit intangibles: 
 
 Core Deposit Intangible Expected Amortization 
 
 dollars in millions 
 Remainder 2025 $ 13 
 2026 46 
 2027 39 
 2028 34 
 2029 30 
 2030 28 
 Thereafter 18 
 Balance, net of accumulated amortization $ 208 

 NOTE 8 — VARIABLE INTEREST ENTITIES 
 
 Unconsolidated VIEs 
 Unconsolidated VIEs include limited partnership interests and joint ventures where BancShares’ involvement is limited to an investor interest and BancShares does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance or obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. 
 
 The table below provides a summary of the assets and liabilities included on the Consolidated Balance Sheets associated with unconsolidated VIEs. The table also presents our maximum exposure to loss which consists of outstanding book basis and unfunded commitments for future investments, and represents potential losses that would be incurred under hypothetical circumstances, such that the value of BancShares’ interests and any associated collateral declines to zero and assuming no recovery. BancShares believes the possibility is remote under this hypothetical scenario; accordingly, this disclosure is not an indication of expected loss. 
 
 Unconsolidated VIEs Carrying Value 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Affordable housing tax credit investments $ 2,631 $ 2,357 
 Other tax credit equity investments 41 2 
 Total tax credit equity investments $ 2,672 $ 2,359 
 Other unconsolidated investments 159 157 
 Total affordable housing tax credit and other unconsolidated investments (maximum loss exposure) (1) 
 $ 2,831 $ 2,516 
 Liabilities for commitments to fund tax credit investments (2) 
 $ 1,295 $ 1,214 

 (1) Included in other assets. 
 (2) Represents commitments to invest in qualified affordable housing investments and other investments qualifying for community reinvestment tax credits. These commitments are payable on demand and included in other liabilities. 
 
 We have investments in qualified affordable housing projects, primarily to support our Community Reinvestment Act (“CRA”) initiatives and obtain tax credits. These investments are accounted for using the PAM and provide tax benefits in the form of tax deductions from operating losses and tax credits. Under the PAM, the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received, and the net investment performance is recognized on the Consolidated Statements of Income as a component of income tax expense. 
 
 35 

 The table below summarizes the amortization of our affordable housing tax credit investments and the related tax credits and other tax benefits that are recognized in income tax expense on the Consolidated Statements of Income. 
 
 Tax Credit Investments Recognized in Income Tax Expense 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 2025 2024 2025 2024 
 Amortization of affordable housing tax credit investments (1) 
 $ 63 $ 58 $ 197 $ 176 
 Tax credits from affordable housing tax credit investments ( 66 ) ( 58 ) ( 201 ) ( 173 ) 
 
 Other tax benefits from affordable housing tax credit investments ( 15 ) ( 8 ) ( 38 ) ( 29 ) 
 Net income tax benefit from affordable housing tax credit investments (2) 
 $ ( 18 ) $ ( 8 ) $ ( 42 ) $ ( 26 ) 

 (1) Amortization is included in depreciation, amortization, and accretion, net as an adjustment to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows. 
 (2) Net income tax benefit impact is included in net income in cash flows from operating activities on the Consolidated Statements of Cash Flows. Changes in income taxes payable are reported in the net change in other liabilities as an adjustment to reconcile net income to net cash provided by operating activities. 
 
 NOTE 9 — BORROWINGS 
 
 Short-term Borrowings 
 
 Securities Sold under Agreements to Repurchase 
 BancShares held $ 423 million and $ 367 million at September 30, 2025 and December 31, 2024, respectively, of securities sold under agreements to repurchase that have overnight contractual maturities and are collateralized by government agency securities. The weighted average interest rate for securities sold under agreements to repurchase was 0.47 % and 0.59 % at September 30, 2025 and December 31, 2024, respectively. 
 
 BancShares utilizes securities sold under agreements to repurchase to facilitate the needs for collateralization of commercial customers and secure wholesale funding needs. Repurchase agreements are transactions whereby BancShares offers to sell to a counterparty an undivided interest in an eligible security at an agreed upon purchase price, and which obligates BancShares to repurchase the security at an agreed upon date, repurchase price and interest rate. These agreements are recorded at the amount of cash received in connection with the transactions and are reflected as securities sold under customer repurchase agreements. 
 
 BancShares monitors collateral levels on a continuous basis and maintains records of each transaction specifically describing the applicable security and the counterparty’s fractional interest in that security, and segregates the security from general assets in accordance with regulations governing custodial holdings of securities. The primary risk with repurchase agreements is market risk associated with the investments securing the transactions, as additional collateral may be required based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with safekeeping agents. The carrying value of investment securities pledged as collateral under repurchase agreements was $ 500 million and $ 435 million at September 30, 2025 and December 31, 2024, respectively. 
 
 36 

 Long-term Borrowings 
 
 On September 5, 2025, the Parent Company issued and sold $ 600 million aggregate principal amount of its 5.600 % Fixed Rate Reset Subordinated Notes due in 2035 in a public offering. On March 12, 2025, the Parent Company issued and sold $ 500 million aggregate principal amount of its 5.231 % Fixed-to-Floating Rate Senior Notes due in 2031 and $ 750 million aggregate principal amount of its 6.254 % Fixed-to-Fixed Rate Subordinated Notes due in 2040 in a public offering. 
 
 On June 15, 2025, the Parent Company redeemed all $ 350 million aggregate principal amount of its 3.375 % Fixed-to-Floating Rate Subordinated Notes due in 2030. 
 
 The following table presents long-term borrowings, net of the respective unamortized purchase accounting adjustments and issuance costs: 
 
 Long-term Borrowings 
 
 dollars in millions Maturity September 30, 2025 December 31, 2024 
 Parent Company: 
 Senior: 
 Fixed-to-Floating Senior Notes at 5.231 % (1) 
 March 2031 $ 497 $ — 
 Subordinated: 
 Fixed-to-Floating Subordinated Notes at 3.375 % (2) 
 March 2030 — 350 
 Fixed Rate Reset Subordinated Notes at 5.600 % (3) 
 September 2035 597 — 
 Fixed-to-Fixed Subordinated Notes at 6.254 % (4) 
 March 2040 745 — 
 Subsidiaries: 
 Senior: 
 Fixed Senior Unsecured Notes at 6.000 % 
 April 2036 58 58 
 Subordinated: 
 Fixed Subordinated Notes at 6.125 % 
 March 2028 434 445 
 Secured: 
 Purchase Money Note to FDIC fixed at 3.500 % (5) 
 March 2028 35,854 35,816 
 Capital lease obligations Maturities through May 2057 67 15 
 Total long-term borrowings $ 38,252 $ 36,684 

 (1) The fixed rate period will end March 12, 2030, and the notes will thereafter bear a floating interest rate equal to a benchmark rate based on the Compounded Secured Overnight Financing Rate (“SOFR”) Index Rate plus 141 basis points (“bps”) per annum until the maturity date (or date of earlier redemption). 
 (2) The fixed rate period ended on March 15, 2025, and the notes converted to a floating interest rate equal to Three-Month Term SOFR plus 246.5 bps per annum. The notes included a callable feature and were redeemed on June 15, 2025. 
 (3) The interest rate will reset on September 5, 2030, and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate as of the day falling two business days prior to the notes reset date plus 185 bps per annum until the maturity date (or date of earlier redemption). 
 (4) The interest rate will reset on March 12, 2035, and the notes will thereafter bear a fixed interest rate equal to the Five-year U.S. Treasury Rate as of the day falling two business days prior to the notes reset date plus 197 bps per annum until the maturity date (or date of earlier redemption). 
 (5) Refer to Note 2—Business Combinations and Note 4—Loans and Leases. 
 
 Pledged Assets 
 Refer to the “Loans Pledged” section in Note 4—Loans and Leases for information on loans pledged as collateral to secure borrowings. Additionally, interest-earning deposits at banks included $ 212 million and $ 211 million at September 30, 2025 and December 31, 2024, respectively, that were required minimum deposits under the Purchase Money Note. 
 
 NOTE 10 — DERIVATIVE FINANCIAL INSTRUMENTS 
 
 Our derivatives designated as hedging instruments include interest rate swap contracts utilized to manage our interest rate exposure for items on our Consolidated Balance Sheets. This includes floating-rate loan portfolio cash flow hedges and fair value hedges of our fixed-rate borrowings and deposits. 
 
 Our derivatives not designated as hedging instruments mainly include interest rate and foreign exchange contracts that our customers utilized for their risk management needs. We typically manage our exposure to these customer derivatives by entering into offsetting or “back-to-back” interest rate and foreign exchange contracts with third-party dealers. 
 
 Derivative instruments that are cleared through certain central counterparty clearing houses are settled-to-market and reported net of collateral positions. 
 Refer to Note 11—Fair Value for further information on derivatives. 
 37 

 The following table presents notional amounts and fair values of derivative financial instruments: 
 
 Notional Amount and Fair Value of Derivative Financial Instruments 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Notional Amount Asset Fair Value Liability Fair Value Notional Amount Asset Fair Value Liability Fair Value 
 Derivatives designated as hedging instruments (Qualifying hedges) 
 Fair Value Hedges 
 Interest rate contracts hedging time deposits $ 134 $ — $ — $ 334 $ — $ — 
 Interest rate contracts hedging long-term borrowings 
 200 — — 750 — — 
 Total fair value hedges (1) (2) 
 334 — — 1,084 — — 
 Cash Flow Hedges 
 Interest rate contracts hedging loans (1) (2) 
 2,500 — — 3,500 1 — 
 Total derivatives designated as hedging instruments $ 2,834 $ — $ — $ 4,584 $ 1 $ — 
 Derivatives not designated as hedging instruments (Non-qualifying hedges) 
 Interest rate contracts (1) (2) 
 $ 28,290 $ 403 $ ( 383 ) $ 26,235 $ 491 $ ( 516 ) 
 Foreign exchange contracts (3) 
 7,969 145 ( 136 ) 7,843 152 ( 108 ) 
 Other contracts (4) 
 1,497 22 ( 1 ) 1,316 16 ( 1 ) 
 Total derivatives not designated as hedging instruments $ 37,756 $ 570 $ ( 520 ) $ 35,394 $ 659 $ ( 625 ) 
 Gross derivatives fair values presented in the Consolidated Balance Sheets $ 570 $ ( 520 ) $ 660 $ ( 625 ) 
 Less: gross amounts offset in the Consolidated Balance Sheets — — — — 
 Net amount presented in other assets and other liabilities in the Consolidated Balance Sheets $ 570 $ ( 520 ) $ 660 $ ( 625 ) 

 (1) Fair value balances include accrued interest. 
 (2) BancShares accounts for swap contracts cleared by the Chicago Mercantile Exchange and LCH Clearnet as “settled-to-market.” As a result, the derivative asset and liability fair values in the table above are presented net of the variation margin payments. Refer to the table below for more information. 
 (3) The foreign exchange contracts exclude foreign exchange spot contracts. The notional and net fair value amounts of these contracts were $ 566 million and $ 0 million, respectively, as of September 30, 2025, and $ 177 million and $ 0 million, respectively, as of December 31, 2024. 
 (4) Other derivative contracts not designated as hedging instruments include risk participation agreements and equity warrants. 
 
 The following table presents the impact of variation margin netting (form of collateral payment when the underlying fair value changes) on derivative assets and liabilities: 
 
 Variation Margin Payments 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Asset Fair Value Liability Fair Value Asset Fair Value Liability Fair Value 
 Derivatives designated as hedging instruments (Qualifying hedges) 
 Gross fair value $ 18 $ — $ 15 $ — 
 Cleared trades, variation margin netting ( 18 ) — ( 14 ) — 
 Total derivatives designated as hedging instruments $ — $ — $ 1 $ — 
 Derivatives not designated as hedging instruments (Non-qualifying hedges) 
 Gross fair value $ 625 $ ( 563 ) $ 742 $ ( 647 ) 
 Cleared trades, variation margin netting ( 55 ) 43 ( 83 ) 22 
 Total derivatives not designated as hedging instruments $ 570 $ ( 520 ) $ 659 $ ( 625 ) 
 Gross derivatives fair values presented in the Consolidated Balance Sheets $ 570 $ ( 520 ) $ 660 $ ( 625 ) 
 Amounts subject to master netting agreements (1) 
 ( 116 ) 116 ( 48 ) 48 
 Cash collateral pledged (received) subject to master netting agreements (2) 
 ( 218 ) 75 ( 539 ) 2 
 Total net derivative fair value $ 236 $ ( 329 ) $ 73 $ ( 575 ) 

 (1) BancShares’ derivative transactions are governed by International Swaps and Derivatives Association (“ISDA”) agreements that allow for net settlements of certain payments as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. BancShares believes its ISDA agreements meet the definition of a master netting arrangement or similar agreement for purposes of the above disclosure. 
 (2) In conjunction with the ISDA agreements described above, BancShares has entered into collateral arrangements with its counterparties, which provide for the exchange of cash depending on the change in the market valuation of the derivative contracts outstanding. Such collateral is available to be applied in settlement of the net balances upon an event of default of one of the counterparties. Collateral pledged or received is included in other assets or deposits, respectively. 
 
 38 

 Fair Value Hedges 
 The following table presents the impact of fair value hedges recorded in interest expense on the Consolidated Statements of Income: 
 
 Recognized Gains (Losses) on Fair Value Hedges 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 Interest Expense 2025 2024 2025 2024 
 Gain (loss) on hedging instruments - time deposits Deposits $ — $ 2 $ — $ 1 
 Gain (loss) on hedging instruments - borrowings Borrowings — 4 — ( 2 ) 
 Gain (loss) on hedged item - time deposits Deposits 1 ( 3 ) 1 ( 2 ) 
 Gain (loss) on hedged item - borrowings Borrowings — ( 5 ) 2 — 
 
 Net gain on fair value hedges Total interest expense $ 1 $ ( 2 ) $ 3 $ ( 3 ) 

 The following table presents the carrying value of hedged items and associated cumulative hedging adjustment related to fair value hedges: 
 
 Carrying Value of Hedged Items 
 
 dollars in millions Cumulative Fair Value Hedging Adjustment Included in the Carrying Value of Hedged Items 
 Carrying Value of Hedged Items Currently Designated No Longer Designated 
 September 30, 2025 
 
 Long-term borrowings $ 217 $ — $ — 
 Deposits 134 — — 
 December 31, 2024 
 Long-term borrowings 795 2 — 
 Deposits 335 1 — 

 Cash Flow Hedges 
 The following table presents the pretax unrealized gain on hedging instruments in cash flow hedges, which are reported in other comprehensive income, and the pretax amount reclassified from accumulated other comprehensive income (“AOCI”) to earnings: 
 
 Unrealized Gain on Cash Flow Hedges 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 2025 2024 2025 2024 
 Other comprehensive income on cash flow hedge derivatives before reclassifications $ ( 2 ) $ 14 $ 10 $ 17 
 Amounts reclassified from AOCI to earnings — 2 ( 4 ) 2 
 Other comprehensive income on cash flow hedge derivatives $ ( 2 ) $ 16 $ 6 $ 19 
 
 The following table presents other information for cash flow hedges: 
 
 Other Information for Cash Flow Hedges 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Unrealized gain on cash flow hedge derivatives reported in AOCI, net of income taxes $ 13 $ 8 
 
 Estimate to be reclassified from AOCI to earnings during the next 12 months, net of income taxes (1) 
 $ 7 $ 7 
 Maximum number of months over which forecasted cash flows are hedged 22 24 

 (1) Reclassified amounts could differ from amounts actually recognized due to factors such as changes in interest rates, hedge de-designations and the addition of other hedges. 
 39 

 Non-Qualifying Hedges 
 The following table presents gains on non-qualifying hedges recognized on the Consolidated Statements of Income: 
 
 Gains (Losses) on Non-Qualifying Hedges 
 
 dollars in millions Three Months Ended September 30, Nine Months Ended September 30, 
 Amounts Recognized 2025 2024 2025 2024 
 Interest rate contracts Other noninterest income $ 4 $ ( 5 ) $ 10 $ 6 
 Foreign currency forward contracts (1) 
 Other noninterest income 12 ( 20 ) ( 52 ) 3 
 Other contracts Other noninterest income 1 2 3 1 
 Total non-qualifying hedges - income statement impact $ 17 $ ( 23 ) $ ( 39 ) $ 10 

 (1) This is primarily related to economic hedges of foreign currency risks arising from loans and other assets denominated in foreign currency. There is an offsetting impact within noninterest income for the foreign exchange revaluation of the associated assets denominated in foreign currency. 
 
 NOTE 11 — FAIR VALUE 
 
 Fair Value Hierarchy 
 BancShares measures certain financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. 
 
 Assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the lowest level of input significant to the fair value measurement with Level 1 inputs considered highest and Level 3 inputs considered lowest. A brief description of each input level follows: 
 • Level 1 inputs are quoted prices in active markets for identical assets and liabilities. 
 • Level 2 inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices observable for the assets or liabilities and market corroborated inputs. 
 • Level 3 inputs are unobservable inputs for the asset or liability. These unobservable inputs and assumptions reflect the estimates market participants would use in pricing the asset or liability. 
 
 40 

 Assets and Liabilities Measured at Fair Value - Recurring Basis 
 The following table presents assets and liabilities measured at fair value on a recurring basis: 
 
 Assets and Liabilities Measured at Fair Value - Recurring Basis 
 
 dollars in millions September 30, 2025 
 Total Level 1 Level 2 Level 3 
 Assets 
 Investment securities available for sale 
 U.S. Treasury $ 13,781 $ — $ 13,781 $ — 
 Government agency 52 — 52 — 
 Residential mortgage-backed securities 17,435 — 17,435 — 
 Commercial mortgage-backed securities 3,428 — 3,428 — 
 Corporate bonds 250 — 141 109 
 Municipal bonds 17 — 17 — 
 
 Total investment securities available for sale $ 34,963 $ — $ 34,854 $ 109 
 Marketable equity securities 110 46 64 — 
 Loans held for sale 80 — 80 — 
 Loans 22 — 22 — 
 Derivative assets (1) 
 
 Total qualifying hedge assets $ — $ — $ — $ — 
 Interest rate contracts — non-qualifying hedges $ 403 $ — $ 400 $ 3 
 Foreign exchange contracts — non-qualifying hedges 145 — 145 — 
 Other derivative contracts — non-qualifying hedges 22 — — 22 
 Total non-qualifying hedge assets $ 570 $ — $ 545 $ 25 
 Total derivative assets $ 570 $ — $ 545 $ 25 
 Liabilities 
 Derivative liabilities (1) 
 
 Interest rate contracts — qualifying hedges $ — $ — $ — $ — 
 
 Interest rate contracts — non-qualifying hedges $ 383 $ — $ 383 $ — 
 Foreign exchange contracts — non-qualifying hedges 136 — 136 — 
 Other derivative contracts — non-qualifying hedges 1 — — 1 
 Total non-qualifying hedge liabilities $ 520 $ — $ 519 $ 1 
 Total derivative liabilities $ 520 $ — $ 519 $ 1 
 (1) Derivative fair values include accrued interest. 
 
 41 

 dollars in millions December 31, 2024 
 Total Level 1 Level 2 Level 3 
 Assets 
 Investment securities available for sale 
 U.S. Treasury $ 13,903 $ — $ 13,903 $ — 
 Government agency 77 — 77 — 
 Residential mortgage-backed securities 15,620 — 15,620 — 
 Commercial mortgage-backed securities 3,666 — 3,666 — 
 Corporate bonds 467 — 299 168 
 Municipal bonds 17 — 17 — 
 
 Total investment securities available for sale $ 33,750 $ — $ 33,582 $ 168 
 Marketable equity securities 101 48 53 — 
 Loans held for sale 55 — 55 — 
 Derivative assets (1) 
 
 Total qualifying hedge assets $ 1 $ — $ 1 $ — 
 Interest rate contracts — non-qualifying hedges $ 491 $ — $ 490 $ 1 
 Foreign exchange contracts — non-qualifying hedges 152 — 152 — 
 Other derivative contracts — non-qualifying hedges 16 — — 16 
 Total non-qualifying hedge assets $ 659 $ — $ 642 $ 17 
 Total derivative assets $ 660 $ — $ 643 $ 17 
 Liabilities 
 Derivative liabilities (1) 
 
 Interest rate contracts — qualifying hedges $ — $ — $ — $ — 
 
 Interest rate contracts — non-qualifying hedges $ 516 $ — $ 516 $ — 
 Foreign exchange contracts — non-qualifying hedges 108 — 108 — 
 Other derivative contracts — non-qualifying hedges 1 — — 1 
 Total non-qualifying hedge liabilities $ 625 $ — $ 624 $ 1 
 Total derivative liabilities $ 625 $ — $ 624 $ 1 

 (1) Derivative fair values include accrued interest. 
 
 The methods and assumptions used to estimate the fair value of each class of financial instruments measured at fair value on a recurring basis are as follows: 
 
 Investment securities available for sale . The fair value of U.S. Treasury, government agency, mortgage-backed securities, municipal bonds, and a portion of the corporate bonds are generally estimated using a third-party pricing service. To obtain an understanding of the processes and methodologies used, management reviews correspondence from the third-party pricing service. Management also performs a price variance analysis process to corroborate the reasonableness of prices. The third-party provider evaluates securities based on comparable investments with trades and market data and will utilize pricing models which use a variety of inputs, such as benchmark yields, reported trades, issuer spreads, benchmark securities, bids and offers as needed. These securities are generally classified as Level 2. The remaining corporate bonds held are generally measured at fair value based on indicative bids from broker-dealers using inputs that are not directly observable. These securities are classified as Level 3. 
 
 Marketable equity securities. Equity securities are measured at fair value using observable closing prices. The valuation also considers the amount of market activity by examining trade volume. Equity securities are classified as Level 1 if they are traded in an active market and as Level 2 if the observable closing price is from a less than active market. 
 
 Loans and Loans held for sale. Certain residential real estate loans originated for sale to investors are carried at fair value based on quoted market prices for similar types of loans, which are considered Level 2 inputs. In instances when loans are not sold and subsequently transferred to portfolio, accounting at fair value is continued. 
 
 Derivative Assets and Liabilities. Derivatives were valued using models that incorporate inputs depending on the type of derivative. Other than the fair value of equity warrants and credit derivatives, which were estimated using Level 3 inputs, most derivative instruments were valued using Level 2 inputs based on observed pricing for similar assets and liabilities and model-based valuation techniques for which all significant assumptions are observable in the market. Refer to Note 10—Derivative Financial Instruments for notional amounts and fair values. 
 
 42 

 The following tables summarize information about significant unobservable inputs related to BancShares’ categories of Level 3 financial assets and liabilities measured on a recurring basis: 
 
 Quantitative Information About Level 3 Fair Value Measurements - Recurring Basis 
 
 dollars in millions 
 Financial Instrument Estimated Fair Value Valuation Technique Significant Unobservable Inputs 
 September 30, 2025 December 31, 2024 
 Assets 
 Corporate bonds $ 109 $ 168 Indicative bid provided by broker Multiple factors, including but not limited to, current operations, financial condition, cash flows, and recently executed financing transactions related to the issuer. 
 Interest rate & other derivative — non-qualifying hedges $ 25 $ 17 Internal valuation model Multiple factors, including but not limited to, private company valuation, illiquidity discount, and estimated life of the instrument. 
 Liabilities 
 Interest rate & other derivative — non-qualifying hedges $ 1 $ 1 Internal valuation model Not material 

 The following table summarizes the changes in estimated fair value for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3): 
 
 Changes in Estimated Fair Value of Level 3 Financial Assets and Liabilities - Recurring Basis 
 
 dollars in millions Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 
 Corporate Bonds Other Derivative Assets — Non-Qualifying Other Derivative Liabilities — Non-Qualifying Corporate Bonds Other Derivative Assets — Non-Qualifying Other Derivative Liabilities — Non-Qualifying 
 Beginning balance $ 168 $ 17 $ 1 $ 157 $ 7 $ 1 
 Purchases — 6 — — 7 — 
 Changes in fair value included in earnings — 4 — ( 1 ) 1 — 
 Changes in fair value included in comprehensive income 9 — — 8 — — 
 
 Maturity and settlements ( 68 ) ( 2 ) — — — — 
 Ending balance $ 109 $ 25 $ 1 $ 164 $ 15 $ 1 

 Fair Value Option 
 The following table summarizes the difference between the aggregate fair value and the unpaid principal balance (“UPB”) for residential mortgage loans originated for sale measured at fair value: 
 
 Aggregate Fair Value and UPB - Residential Mortgage Loans 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Fair Value Unpaid Principal Balance Difference Fair Value Unpaid Principal Balance Difference 
 Originated loans held for sale (1) 
 $ 102 $ 102 $ — $ 55 $ 54 $ 1 

 (1) Originated loans held for sale include loans held for sale and loans originated for sale but transferred to portfolio and held for investment. 
 
 BancShares has elected the fair value option for residential mortgage loans originated for sale. This election reduces certain timing differences in the Consolidated Statements of Income and better aligns with the management of the portfolio from a business perspective. The changes in fair value that were recorded as a component of other noninterest income were insignificant for the three and nine months ended September 30, 2025 and 2024. Interest earned on originated loans held for sale is recorded within interest income on loans and leases in the Consolidated Statements of Income. 
 
 No originated loans held for sale were 90 or more days past due or on nonaccrual status as of September 30, 2025 or December 31, 2024. 
 
 43 

 Assets Measured at Estimated Fair Value on a Non-recurring Basis 
 Certain assets or liabilities are required to be measured at estimated fair value on a non-recurring basis subsequent to initial recognition. Generally, these adjustments are the result of lower of cost or fair value (“LOCOM”) or other impairment accounting. The following table presents carrying value of assets measured at estimated fair value on a non-recurring basis for which gains and losses have been recorded in the periods. The gains and losses reflect amounts recorded for the respective periods, regardless of whether the asset is still held at period end. 
 
 Assets Measured at Fair Value - Non-recurring Basis 
 
 dollars in millions Fair Value Measurements 
 Total Level 1 Level 2 Level 3 Total Gains (Losses) 
 September 30, 2025 
 Assets held for sale - loans $ 2 $ — $ — $ 2 $ ( 4 ) 
 Loans - collateral dependent loans 181 — — 181 ( 141 ) 
 Other real estate owned 76 — — 76 ( 1 ) 
 
 Total $ 259 $ — $ — $ 259 $ ( 146 ) 
 December 31, 2024 
 Assets held for sale - loans $ 13 $ — $ — $ 13 $ ( 7 ) 
 Loans - collateral dependent loans 388 — — 388 ( 171 ) 
 Other real estate owned 16 — — 16 6 
 
 Total $ 417 $ — $ — $ 417 $ ( 172 ) 

 Certain other assets are adjusted to their fair value on a non-recurring basis, including certain loans, OREO, and goodwill, which are periodically tested for impairment. Most loans held for investment, deposits, and borrowings are not reported at fair value. 
 
 The methods and assumptions used to estimate the fair value of each class of financial instruments measured at fair value on a non-recurring basis are as follows: 
 
 Assets held for sale - loans. Loans held for investment subsequently transferred to held for sale are carried at the LOCOM. When available, the fair values for the transferred loans are based on quoted prices from the purchase commitments for the individual loans being transferred and are considered Level 1 inputs. The fair value of Level 2 assets was primarily estimated based on prices of recent trades of similar assets. For other loans held for sale, the fair value of Level 3 assets was primarily measured under the income approach using the discounted cash flow model based on Level 3 inputs including discount rate or the price of committed trades. Gains and losses are recorded in noninterest income. 
 
 Loans - collateral dependent loans. The population of Level 3 loans measured at fair value that are experiencing financial difficulty and measured on a non-recurring basis includes collateral-dependent loans evaluated individually. Collateral values are determined using appraisals or other third-party value estimates of the subject property discounted based on estimated selling costs, and adjustments for other external factors that may impact the marketability of the collateral. Gains and losses generally reflect the required net provision and charge-offs specific to the loans included in the population for the respective periods and are recorded in the provision for credit losses. 
 
 Other real estate owned. OREO is carried at LOCOM. OREO asset valuations are determined by using appraisals or other third-party value estimates of the subject property with discounts, generally between 7 % and 10 %, applied for estimated selling costs and other external factors that may impact the marketability of the property. At September 30, 2025 and December 31, 2024, the weighted average discount applied was 9.66 % and 9.45 %, respectively. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. If there are any significant changes in the market or the subject property, valuations are adjusted or new appraisals are ordered to ensure the reported values reflect the most current information. 
 
 44 

 Financial Instruments Fair Value 
 The table below presents the carrying values and estimated fair values for financial instruments, excluding leases and certain other assets and liabilities for which these disclosures are not required. 
 
 Carrying Values and Fair Values of Financial Assets and Liabilities 
 
 dollars in millions September 30, 2025 
 Estimated Fair Value 
 Carrying Value Level 1 Level 2 Level 3 Total 
 Financial Assets 
 Cash and due from banks $ 874 $ 874 $ — $ — $ 874 
 Interest-earning deposits at banks 24,798 24,798 — — 24,798 
 Securities purchased under agreements to resell 83 — 83 — 83 
 Investment in marketable equity securities 110 46 64 — 110 
 Investment securities available for sale 34,963 — 34,854 109 34,963 
 Investment securities held to maturity 10,051 — 8,838 — 8,838 
 Loans held for sale 110 — 80 30 110 
 Net loans 141,074 — 1,618 140,306 141,924 
 Accrued interest receivable 945 — 945 — 945 
 Federal Home Loan Bank stock 20 — 20 — 20 
 Mortgage servicing rights 30 — — 48 48 
 
 Derivative assets - non-qualifying hedges 570 — 545 25 570 
 Financial Liabilities 
 Deposits with no stated maturity 152,116 — 152,116 — 152,116 
 Time deposits 11,074 — 11,058 — 11,058 
 Credit balances of factoring clients 1,326 — — 1,326 1,326 
 Securities sold under customer repurchase agreements 423 — 423 — 423 
 
 Long-term borrowings 38,185 — 38,211 — 38,211 
 Accrued interest payable 105 — 105 — 105 
 
 Derivative liabilities - non-qualifying hedges 520 — 519 1 520 
 
 December 31, 2024 
 Estimated Fair Value 
 Carrying Value Level 1 Level 2 Level 3 Total 
 Financial Assets 
 Cash and due from banks $ 814 $ 814 $ — $ — $ 814 
 Interest-earning deposits at banks 21,364 21,364 — — 21,364 
 Securities purchased under agreements to resell 158 — 158 — 158 
 Investment in marketable equity securities 101 48 53 — 101 
 Investment securities available for sale 33,750 — 33,582 168 33,750 
 Investment securities held to maturity 10,239 — 8,702 — 8,702 
 Loans held for sale 82 — 55 27 82 
 Net loans 136,567 — 1,463 133,409 134,872 
 Accrued interest receivable 902 — 902 — 902 
 Federal Home Loan Bank stock 20 — 20 — 20 
 Mortgage servicing rights 27 — — 47 47 
 Derivative assets - qualifying hedges 1 — 1 — 1 
 Derivative assets - non-qualifying hedges 659 — 642 17 659 
 Financial Liabilities 
 Deposits with no stated maturity 141,976 — 141,976 — 141,976 
 Time deposits 13,253 — 13,247 — 13,247 
 Credit balances of factoring clients 1,016 — — 1,016 1,016 
 Securities sold under customer repurchase agreements 367 — 367 — 367 
 
 Long-term borrowings 36,669 — 36,220 — 36,220 
 Accrued interest payable 134 — 134 — 134 
 
 Derivative liabilities - non-qualifying hedges 625 — 624 1 625 

 45 

 The methods and assumptions used to estimate the fair value of each class of financial instruments not discussed elsewhere are as follows: 
 
 Interest-earning Deposits at Banks. The carrying value of interest-earning deposits at banks approximates its fair value due to its short-term nature and is classified on the fair value hierarchy as Level 1. The balances at September 30, 2025 and December 31, 2024 included $ 212 million and $ 211 million, respectively, as a required minimum deposit under the Purchase Money Note. 
 
 Net loans. The carrying value of net loans is net of the ALLL. Loans are generally valued by discounting expected cash flows using market inputs with adjustments based on cohort level assumptions for certain loan types as well as internally developed estimates at a business segment level. Due to the significance of the unobservable market inputs and assumptions, as well as the absence of a liquid secondary market for most loans, these loans are classified as Level 3. Certain loans are measured based on observable market prices sourced from external data providers and classified as Level 2. Nonaccrual loans are written down and reported at their estimated recovery value, which approximates their fair value, and classified as Level 3. 
 
 Securities Purchased Under Agreements to Resell. The fair value of securities purchased under agreements to resell equal the carrying value due to the short term nature, generally overnight, and therefore present an insignificant risk of change in fair value due to changes in market interest rate, and classified as Level 2. 
 
 Investment securities held to maturity. BancShares’ portfolio of debt securities held to maturity consists of mortgage-backed securities issued by government agencies and government sponsored entities, U.S. Treasury notes, unsecured bonds issued by government agencies and government sponsored entities, and securities issued by the Supranational Entities & Multilateral Development Banks. We primarily use prices obtained from pricing services to determine the fair value of securities, which are Level 2 inputs. 
 
 FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value, as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered Level 2 inputs. 
 
 Mortgage servicing rights. The fair value of mortgage servicing rights (“MSRs”) is determined using a pooling methodology. Similar loans are pooled together and a model which relies on discount rates, estimates of prepayment rates and the weighted average cost to service the loans is used to determine the fair value. The inputs used in the fair value measurement for MSRs are considered Level 3 inputs. 
 
 Deposits. The estimated fair value of deposits with no stated maturity, such as demand deposit accounts, money market accounts, and savings accounts was the amount payable on demand at the reporting date. The fair value of time deposits was estimated based on a discounted cash flow technique using Level 2 inputs appropriate to the contractual maturity. 
 
 Credit balances of factoring clients. The impact of the time value of money from the unobservable discount rate for credit balances of factoring clients is inconsequential due to the short term nature of these balances, therefore, the fair value approximated carrying value, and the credit balances are classified as Level 3. 
 
 Short-term borrowed funds. The fair value of short-term borrowed funds, which includes repurchase agreements, approximates carrying value and are classified as Level 2. 
 
 Long-term borrowings. For certain long-term senior and subordinated unsecured borrowings, the fair values are sourced from a third-party pricing service. The fair values of other long-term borrowings are determined by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for FHLB borrowings, senior and subordinated debentures, and other borrowings are classified as Level 2. 
 
 For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of September 30, 2025 and December 31, 2024. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short-term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value. Cash and due from banks is classified as Level 1. Accrued interest receivable and accrued interest payable are classified as Level 2. 
 
 46 

 NOTE 12 — STOCKHOLDERS' EQUITY 
 
 A roll forward of common stock activity is presented in the following table: 
 
 Number of Shares of Common Stock 
 
 September 30, 2025 
 Common Stock Outstanding 
 Class A Class B 
 Common stock - June 30, 2025 12,070,794 1,005,185 
 Shares repurchased under authorized repurchase plan ( 457,350 ) — 
 
 Common stock - September 30, 2025 11,613,444 1,005,185 
 
 Common stock - December 31, 2024 12,712,436 1,005,185 
 Shares purchased under authorized repurchase plan ( 1,098,992 ) — 
 
 Common stock - September 30, 2025 11,613,444 1,005,185 

 Common Stock 
 The Parent Company has Class A common stock and Class B common stock, each with a par value of $ 1 . Class A common stockholders have one vote per share while Class B common stockholders have 16 votes per share. 
 
 Non-Cumulative Perpetual Preferred Stock 
 
 The following table summarizes BancShares’ non-cumulative perpetual preferred stock: 
 
 Preferred Stock 
 
 dollars in millions, except per share and par value data 
 Preferred Stock Issuance Date Earliest Redemption Date Par Value Shares Authorized, Issued and Outstanding Liquidation Preference Per Share Total Liquidation Preference Dividend 
 Series A March 12, 2020 March 15, 2025 $ 0.01 345,000 $ 1,000 $ 345 5.375 % 
 Series B (1) 
 January 3, 2022 January 4, 2027 0.01 325,000 1,000 325 SOFR + 3.972 % 
 
 Series C January 3, 2022 January 4, 2027 0.01 8,000,000 25 200 5.625 % 

 (1) Upon conversion to SOFR in 2023, BancShares began paying a credit spread adjustment in addition to the stated dividend. 
 
 Dividends on BancShares Series A, B, and C preferred stock (together, “BancShares Preferred Stock”) will be paid when, as, and if declared by the Board of Directors of the Parent Company, or a duly authorized committee thereof, to the extent that the Parent Company has lawfully available funds to pay dividends. If declared, dividends with respect to the BancShares Preferred Stock will accrue and be payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year. Dividends on the BancShares Preferred Stock will not be cumulative. For further description of BancShares Preferred Stock, refer to Note 16—Stockholders’ Equity in the Notes to the Consolidated Financial Statements included in the 2024 Form 10-K. 
 
 47 

 NOTE 13 — ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME 
 
 The following table details the components of AOCI: 
 
 Components of Accumulated Other Comprehensive Loss 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Pretax Income Taxes Net of Income Taxes Pretax Income Taxes Net of Income Taxes 
 Unrealized loss on securities available for sale $ ( 224 ) $ 40 $ ( 184 ) $ ( 762 ) $ 178 $ ( 584 ) 
 Unrealized loss on securities available for sale transferred to held to maturity ( 5 ) 1 ( 4 ) ( 6 ) 2 ( 4 ) 
 Defined benefit pension items 177 ( 46 ) 131 182 ( 47 ) 135 
 
 Unrealized gain on cash flow hedge derivatives 17 ( 4 ) 13 11 ( 3 ) 8 
 Total accumulated other comprehensive loss $ ( 35 ) $ ( 9 ) $ ( 44 ) $ ( 575 ) $ 130 $ ( 445 ) 

 The following table details the changes in the components of AOCI, net of income taxes: 
 
 Changes in Accumulated Other Comprehensive (Loss) Income by Component 
 
 dollars in millions Unrealized loss on securities available for sale Unrealized loss on securities available for sale transferred to held to maturity Defined benefit pension items Unrealized gain on cash flow hedge derivatives Total accumulated other comprehensive loss 
 Balance as of December 31, 2024 $ ( 584 ) $ ( 4 ) $ 135 $ 8 $ ( 445 ) 
 AOCI activity before reclassifications 400 — ( 4 ) 8 404 
 Amounts reclassified from AOCI to earnings — — — ( 3 ) ( 3 ) 
 Other comprehensive income (loss) for the period 400 — ( 4 ) 5 401 
 Balance as of September 30, 2025 $ ( 184 ) $ ( 4 ) $ 131 $ 13 $ ( 44 ) 
 
 Balance as of December 31, 2023 $ ( 577 ) $ ( 5 ) $ 91 $ — $ ( 491 ) 
 AOCI activity before reclassifications 325 — ( 8 ) 12 329 
 Amounts reclassified from AOCI to earnings — 1 — 2 3 
 Other comprehensive loss (income) for the period 325 1 ( 8 ) 14 332 
 Balance as of September 30, 2024 $ ( 252 ) $ ( 4 ) $ 83 $ 14 $ ( 159 ) 

 48 

 Other Comprehensive Income 
 The amounts included in the Consolidated Statements of Comprehensive Income are net of income taxes. The following table presents the pretax and after tax components of other comprehensive income: 
 
 Other Comprehensive Income (Loss) by Component 
 
 dollars in millions Three Months Ended September 30, 
 2025 2024 
 Pretax Income Taxes Net of Income Taxes Pretax Income Taxes Net of Income Taxes Income Statement Line Items 
 Unrealized loss on securities available for sale: 
 
 Other comprehensive income on securities available for sale $ 97 $ ( 25 ) $ 72 $ 594 $ ( 156 ) $ 438 
 
 Unrealized loss on securities available for sale transferred to held to maturity: 
 
 Amounts reclassified from AOCI to earnings $ 1 $ ( 1 ) $ — $ 1 $ — $ 1 Interest on investment securities 
 
 Defined benefit pension items: 
 
 Other comprehensive loss for defined benefit pension items $ ( 1 ) $ — $ ( 1 ) $ — $ — $ — 
 
 Unrealized gain on cash flow hedge derivatives: 
 AOCI activity before reclassifications $ ( 2 ) $ 1 $ ( 1 ) $ 14 $ ( 4 ) $ 10 
 Amounts reclassified from AOCI to earnings — — — 2 — 2 Interest and fees on loans 
 Other comprehensive (loss) income on cash flow hedge derivatives $ ( 2 ) $ 1 $ ( 1 ) $ 16 $ ( 4 ) $ 12 
 Total other comprehensive income $ 95 $ ( 25 ) $ 70 $ 611 $ ( 160 ) $ 451 

 dollars in millions Nine Months Ended September 30, 
 2025 2024 
 Pretax Income Taxes Net of Income Taxes Pretax Income Taxes Net of Income Taxes Income Statement Line Items 
 Unrealized loss on securities available for sale: 
 
 Other comprehensive income on securities available for sale $ 538 $ ( 138 ) $ 400 $ 440 $ ( 115 ) $ 325 
 
 Unrealized loss on securities available for sale transferred to held to maturity: 
 
 Amounts reclassified from AOCI to earnings $ 1 $ ( 1 ) $ — $ 1 $ — $ 1 Interest on investment securities 
 
 Defined benefit pension items: 
 
 Other comprehensive loss for defined benefit pension items $ ( 5 ) $ 1 $ ( 4 ) $ ( 10 ) $ 2 $ ( 8 ) 
 
 Unrealized gain on cash flow hedge derivatives: 
 AOCI activity before reclassifications $ 10 $ ( 2 ) $ 8 $ 17 $ ( 5 ) $ 12 
 Amounts reclassified from AOCI to earnings ( 4 ) 1 ( 3 ) 2 — 2 Interest and fees on loans 
 Other comprehensive income on cash flow hedge derivatives $ 6 $ ( 1 ) $ 5 $ 19 $ ( 5 ) $ 14 
 Total other comprehensive income $ 540 $ ( 139 ) $ 401 $ 450 $ ( 118 ) $ 332 

 49 

 NOTE 14 — EARNINGS PER COMMON SHARE 
 
 The following table sets forth the computation of the basic and diluted earnings per common share: 
 
 Earnings per Common Share 
 
 dollars in millions, except per share data 
 Three Months Ended September 30, Nine Months Ended September 30, 
 2025 2024 2025 2024 
 Net income $ 568 $ 639 $ 1,626 $ 2,077 
 Preferred stock dividends 14 15 43 46 
 Net income available to common stockholders $ 554 $ 624 $ 1,583 $ 2,031 
 Weighted average common shares outstanding 
 Basic shares outstanding 12,849,339 14,375,974 13,217,940 14,480,874 
 Stock-based awards — — — 1,045 
 Diluted shares outstanding 12,849,339 14,375,974 13,217,940 14,481,919 
 Earnings per common share 
 Basic $ 43.08 $ 43.42 $ 119.70 $ 140.27 
 Diluted $ 43.08 $ 43.42 $ 119.70 $ 140.26 

 NOTE 15 — INCOME TAXES 
 
 BancShares’ global effective income tax rates (“ETRs”) were 24.4 % and 26.8 % for the three months ended September 30, 2025 and 2024, respectively, and 24.7 % and 27.3 % for the nine months ended September 30, 2025 and 2024, respectively. The decrease in the ETR for the three and nine months ended September 30, 2025 compared to 2024 was primarily due to an increase in tax credits and a reduction in the state and local income tax rate. 
 
 The quarterly income tax expense is based on a projection of BancShares’ annual ETR. This annual ETR is applied to the year-to-date consolidated pretax income to determine the interim provision for income taxes before discrete items. The ETR each period is also impacted by a number of factors, including the relative mix of domestic and international earnings, effects of changes in enacted tax laws, adjustments to the valuation allowances, and discrete items. The currently forecasted ETR may vary from the actual year-end 2025 ETR due to the changes in these factors. 
 
 On July 4, 2025, President Trump signed into law H.R. 1, referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains several provisions that impact corporate taxation. The enactment of the OBBBA did not have a material impact on the tax rate or results of operations. 
 
 Uncertain Tax Benefits 
 BancShares’ recognizes tax benefits when it is more likely than not that the position will prevail, based solely on the technical merits under the tax law of the relevant jurisdiction. BancShares will recognize the tax benefit if the position meets this recognition threshold determined based on the largest amount of the benefit that is more than likely to be realized. 
 
 Deferred Tax Assets and Valuation Adjustments 
 BancShares’ ability to recognize deferred tax assets (“DTAs”) is evaluated on a quarterly basis to determine if there are any significant events that would affect our ability to utilize existing DTAs. If events are identified that affect our ability to utilize our DTAs, adjustments to the valuation allowance adjustments may be required. 
 
 50 

 NOTE 16 — EMPLOYEE BENEFIT PLANS 
 
 BancShares sponsors non-contributory defined benefit pension plans for its qualifying employees. The service cost component of net periodic benefit cost is included in salaries and wages, while all other non-service cost components are included in other noninterest expense. 
 
 The components of net periodic benefit cost are as follows: 
 
 Three Months Ended September 30, Nine Months Ended September 30, 
 2025 2024 2025 2024 
 Service cost $ 2 $ 2 $ 6 $ 7 
 Interest cost 16 15 48 45 
 Expected return on assets ( 24 ) ( 23 ) ( 71 ) ( 69 ) 
 
 Net periodic benefit $ ( 6 ) $ ( 6 ) $ ( 17 ) $ ( 17 ) 

 NOTE 17 — SEGMENT INFORMATION 
 
 Effective January 1, 2025, we made changes to the composition of our reportable segments as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation, and the segment disclosures below for 2024 were recast to conform with those segment composition changes. 
 
 BancShares’ segments include the General Bank, the Commercial Bank, SVB Commercial, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. We do not aggregate multiple operating segments into a reportable segment. Therefore, each of our operating segments are reportable segments. 
 
 Under our segment expense allocation methodology, allocated expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “All other noninterest expense” in the segment reporting tables below includes the effect of allocated expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate. 
 
 General Bank 
 The General Bank segment delivers products and services to consumer and small business clients through our extensive network of branches, various digital channels and a dedicated Private Bank. We offer a full suite of deposit products, loans (primarily residential mortgages and business and commercial loans), cash management, private banking and wealth management, payment services, and treasury services. We offer conforming and jumbo residential mortgage loans throughout the United States that are primarily originated through branches and retail referrals, employee referrals, internet leads, direct marketing and a correspondent lending channel, as well as through our private banking service. Private banking and wealth management offers a customized suite of products and services to individuals and institutional clients, as well as private equity and venture capital professionals and executive leaders of the innovation companies they support, and premium wine clients. The General Bank segment offers brokerage, investment advisory, private stock loans, other secured and unsecured lending products and vineyard development loans, as well as planning-based financial strategies, family office, financial planning, tax planning and trust services. The General Bank segment also includes a community association bank channel that supports deposit, cash management and lending to homeowner associations and property management companies. 
 
 Revenue is primarily generated from interest earned on loans. Noninterest income is primarily generated from fees for banking and advisory services, including lending-related fees, most of BancShares’ income related to deposit fees and service charges, cardholder services, along with essentially all of the wealth management services income. We primarily originate loans by utilizing our branch network and industry referrals, as well as direct digital marketing efforts. We derive our SBA loans through a network of SBA originators. We periodically purchase loans on a whole-loan basis. We also invest in community development that supports the construction of affordable housing in our communities in line with our CRA initiatives. 
 
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 Commercial Bank 
 The Commercial Bank segment provides a range of lending, leasing, capital markets, asset management, and other financial and advisory services, primarily tailored to commercial and middle market companies in a wide range of industries, including energy, healthcare, technology media and telecommunications, asset-backed lending, capital finance, maritime, aerospace and defense, and sponsor finance. Loans offered are primarily senior secured loans collateralized by accounts receivable, inventory, machinery and equipment, transportation equipment, and/or intangibles, and are often used for working capital, plant expansion, acquisitions, or recapitalizations. These loans include revolving lines of credit and term loans and, depending on the nature of the collateral, may be referred to as collateral-backed loans, asset-based loans or cash flow loans. We provide senior secured loans to developers and other commercial real estate (“CRE”) professionals. Additionally, we provide business loans and leases, including both capital and operating leases, through a highly automated credit approval, documentation and funding process. 
 
 We provide factoring, receivable management and secured financing to businesses that operate in several industries. These include apparel, textile, furniture, home furnishings, and consumer electronics. Factoring entails the assumption of credit risk with respect to trade accounts receivable arising from the sale of goods from our factoring clients to their customers that have been factored (i.e., sold or assigned to the factor). Our factoring clients, which are generally manufacturers or importers of goods, are the counterparties on factoring, financing or receivables purchasing agreements to sell trade receivables to us. Our factoring clients’ customers, which are generally retailers, are the account debtors and obligors on trade accounts receivable that have been factored. 
 
 Revenue is primarily generated from interest and fees on loans. Noninterest income is mostly generated from rental income on operating lease equipment, lending-related fees, including most of BancShares’ capital market fees, and other revenue from banking services. Rental income is generally influenced by the size of the operating lease portfolio. Noninterest income also includes all of the commissions earned on factoring-related activities. We derive most of our commercial lending business through direct marketing to borrowers, lessees, manufacturers, vendors, and distributors. We also utilize referrals as a source for commercial lending business. We may periodically buy participations or syndications of loans and lines of credit and purchase loans on a whole-loan basis. 
 
 Rental income and depreciation expense on operating lease equipment is related to small and large ticket equipment we own and lease to others. Operating lease equipment is subject to depreciation expense over the useful life of the small and large ticket equipment, which is generally 3 - 10 years. 
 
 SVB Commercial 
 The SVB Commercial segment offers products and services to commercial clients and investors across stages, sectors and regions in the innovation ecosystem, as well as private equity and venture capital firms. The SVB Commercial segment provides solutions to the financial needs of commercial clients. Loan products consist of capital call lines of credit, investor dependent loans, and commercial and industrial loans made primarily to technology, life science and healthcare companies. 
 
 Revenue is primarily generated from interest earned on loans. Noninterest income is mostly generated from fees, including essentially all of client investment fees and most of the international fees, and other revenue from lending-related activities and banking services. 
 
 Deposit products include business and analysis checking accounts, money market accounts, multi-currency accounts, bank accounts, sweep accounts, and positive pay services. Services are provided through online and mobile banking platforms as well as branch locations. 
 
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 Rail 
 The Rail segment offers customized leasing and financing solutions on a fleet of railcars and locomotives to railroads and shippers throughout North America. Railcar types include covered hopper cars used to ship grain and agricultural products, plastic pellets, sand, and cement; tank cars for energy products and chemicals; gondolas for coal, steel coil and mill service products; open-top hopper cars for coal and aggregates; boxcars for paper and auto parts; and centerbeams and flat cars for lumber. Revenue is generated primarily from rental income on operating lease equipment, which is included in noninterest income, and to a lesser extent, gains on sale of leasing equipment. Rental income is generally influenced by the size of the operating lease portfolio, utilization of the railcars, re-pricing of equipment renewed upon lease maturities, and pricing on new leases. Re-pricing refers to the rental rate in the renewed equipment contract compared to the prior contract. 
 
 Operating lease equipment is subject to depreciation expense over the useful life of the rail equipment, which is generally longer in duration, 40 - 50 years. The Rail segment leases railcars, primarily pursuant to full-service lease contracts under which we, as lessor, are responsible for railcar maintenance and repair. Maintenance and other operating lease expenses relate to equipment ownership and leasing costs associated with the railcar portfolio and tend to be variable due to timing and the number of railcars coming on or off lease as well as asset condition. 
 
 Corporate 
 All other financial information not included in the segments is reported in Corporate. Corporate contains BancShares’ centralized treasury function, which manages the investment security portfolio, interest-earning deposits at banks and corporate/wholesale funding (e.g., borrowings, Direct Bank deposits and brokered deposits). Corporate deposits are primarily comprised of Direct Bank deposits. 
 
 Corporate includes interest income on investment securities and interest-earning deposits at banks; interest expense for borrowings, Direct Bank deposits, and brokered deposits; as well as funds transfer pricing allocations. Noninterest income includes gains or losses on sales of investment securities, fair value adjustments on marketable equity securities, and income from bank owned life insurance. Personnel cost in Corporate includes the personnel costs not allocated to the operating segments. Corporate includes acquisition-related expenses and certain items related to accounting for business combinations, such as gains on acquisitions, Day 2 Provision for Credit Losses and discount accretion income for certain acquired loans. Corporate also includes the offsetting impacts of Allocated Expenses as discussed above. 
 
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 Segment Results and Select Period End Balances 
 The following tables present the condensed income statements by segment and include the significant segment expenses and measure of segment profit or loss. 
 
 dollars in millions Three Months Ended September 30, 2025 
 General Bank Commercial Bank SVB Commercial Rail Corporate (1) 
 BancShares (2) 
 
 Net interest income (expense) $ 846 $ 303 $ 493 $ ( 55 ) $ 147 $ 1,734 
 Rental income on operating lease equipment — 54 — 219 — 273 
 All other noninterest income 166 101 135 2 22 426 
 Total noninterest income 166 155 135 221 22 699 
 Total revenue 1,012 458 628 166 169 2,433 
 Depreciation on operating lease equipment — 43 — 55 — 98 
 Maintenance and other operating lease expenses — — — 67 — 67 
 Personnel cost 213 74 106 6 418 817 
 Acquisition-related expenses — — — — 28 28 
 All other noninterest expense (3) 
 369 149 267 16 ( 320 ) 481 
 Total noninterest expense 582 266 373 144 126 1,491 
 
 Provision for credit losses 1 168 22 — — 191 
 Income before income taxes 429 24 233 22 43 751 
 Income tax expense 109 6 58 5 5 183 
 Net income $ 320 $ 18 $ 175 $ 17 $ 38 $ 568 
 
 Select Period End Balances 
 Loans and leases $ 65,225 $ 38,841 $ 40,629 $ 63 $ — $ 144,758 
 Operating lease equipment, net — 737 — 8,709 — 9,446 
 
 Deposits 74,596 2,978 39,891 2 45,723 163,190 
 
 Three Months Ended September 30, 2024 
 General Bank Commercial Bank SVB Commercial Rail Corporate (1) 
 BancShares (2) 
 
 Net interest income (expense) $ 760 $ 305 $ 560 $ ( 48 ) $ 219 $ 1,796 
 Rental income on operating lease equipment — 57 — 205 — 262 
 All other noninterest income 149 79 137 2 21 388 
 Total noninterest income 149 136 137 207 21 650 
 Total revenue 909 441 697 159 240 2,446 
 Depreciation on operating lease equipment — 47 — 52 — 99 
 Maintenance and other operating lease expenses — — — 59 — 59 
 Personnel cost 212 68 112 6 390 788 
 Acquisition-related expenses — — — — 46 46 
 All other noninterest expense (3) 
 341 150 272 14 ( 313 ) 464 
 Total noninterest expense 553 265 384 131 123 1,456 
 
 Provision for credit losses 55 11 51 — — 117 
 Income before income taxes 301 165 262 28 117 873 
 Income tax expense 99 41 75 8 11 234 
 Net income $ 202 $ 124 $ 187 $ 20 $ 106 $ 639 
 
 Select Period End Balances 
 Loans and leases $ 64,254 $ 37,281 $ 37,098 $ 62 $ — $ 138,695 
 Operating lease equipment, net — 767 — 8,419 — 9,186 
 
 Deposits 71,898 3,126 35,844 14 40,692 151,574 
 
 (1) Corporate includes all other financial information that is not included in the reportable segments. 
 
 (2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate. 
 
 (3) All other noninterest expense represents “other segment items” under Accounting Standards Codification (“ASC”) 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above. 
 
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 dollars in millions Nine Months Ended September 30, 2025 
 General Bank Commercial Bank SVB Commercial Rail Corporate (1) 
 BancShares (2) 
 
 Net interest income (expense) $ 2,458 $ 895 $ 1,476 $ ( 160 ) $ 423 $ 5,092 
 Rental income on operating lease equipment — 164 — 651 — 815 
 All other noninterest income 494 268 397 7 31 1,197 
 Total noninterest income 494 432 397 658 31 2,012 
 Total revenue 2,952 1,327 1,873 498 454 7,104 
 Depreciation on operating lease equipment — 131 — 165 — 296 
 Maintenance and other operating lease expenses — — — 180 — 180 
 Personnel cost 637 215 330 20 1,243 2,445 
 Acquisition-related expenses — — — — 108 108 
 All other noninterest expense (3) 
 1,090 462 804 56 ( 957 ) 1,455 
 Total noninterest expense 1,727 808 1,134 421 394 4,484 
 
 Provision for credit losses 60 300 100 — — 460 
 Income before income taxes 1,165 219 639 77 60 2,160 
 Income tax expense (benefit) 298 56 162 19 ( 1 ) 534 
 Net income $ 867 $ 163 $ 477 $ 58 $ 61 $ 1,626 
 
 Nine Months Ended September 30, 2024 
 General Bank Commercial Bank SVB Commercial Rail Corporate (1) 
 BancShares (2) 
 
 Net interest income (expense) $ 2,174 $ 916 $ 1,636 $ ( 136 ) $ 844 $ 5,434 
 Rental income on operating lease equipment — 172 — 604 — 776 
 All other noninterest income 446 239 405 8 42 1,140 
 Total noninterest income 446 411 405 612 42 1,916 
 Total revenue 2,620 1,327 2,041 476 886 7,350 
 Depreciation on operating lease equipment — 141 — 152 — 293 
 Maintenance and other operating lease expenses — — — 164 — 164 
 Personnel cost 604 205 354 20 1,094 2,277 
 Acquisition-related expenses — — — — 148 148 
 All other noninterest expense (3) 
 978 425 765 43 ( 875 ) 1,336 
 Total noninterest expense 1,582 771 1,119 379 367 4,218 
 
 Provision for credit losses 113 70 93 — — 276 
 Income before income taxes 925 486 829 97 519 2,856 
 Income tax expense 270 127 235 27 120 779 
 Net income $ 655 $ 359 $ 594 $ 70 $ 399 $ 2,077 
 
 (1) Corporate includes all other financial information that is not included in the reportable segments. 
 
 (2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate. 
 
 (3) All other noninterest expense represents “other segment items” under ASC 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above. 
 
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 NOTE 18 — COMMITMENTS AND CONTINGENCIES 
 
 Commitments 
 To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments involve elements of credit, interest rate or liquidity risk and include commitments to extend credit and standby letters of credit. 
 
 The accompanying table summarizes credit-related commitments and other purchase and funding commitments: 
 
 dollars in millions September 30, 2025 December 31, 2024 
 Financing Commitments 
 Financing assets (excluding leases) $ 51,935 $ 53,250 
 Letters of Credit 
 Standby letters of credit 2,478 2,188 
 Other letters of credit 158 103 
 Deferred Purchase Agreements 1,870 1,802 
 Purchase and Funding Commitments (1) 
 232 178 

 (1) BancShares’ purchase and funding commitments relate to the equipment leasing businesses’ commitments to fund Rail’s railcar manufacturer purchase and upgrade commitments. 
 
 Financing Commitments 
 Commitments to extend credit are legally binding agreements to lend to customers. These commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires collateral be pledged to secure the commitment, including cash deposits, securities and other assets. 
 
 Financing commitments, referred to as net unfunded loan commitments or lines of credit, primarily reflect BancShares’ agreements to lend to its customers, subject to the customers’ compliance with contractual obligations. At September 30, 2025 and December 31, 2024, substantially all undrawn financing commitments were senior facilities. Financing commitments also include $ 340 million and $ 79 million at September 30, 2025 and December 31, 2024, respectively, related to off-balance sheet commitments to fund equity investments. Commitments to fund equity investments are contingent on events that have yet to occur and may be subject to change. 
 
 As financing commitments may not be fully drawn, may expire unused, may be reduced or canceled at the customer’s request, and may require the customer to be in compliance with certain conditions, commitment amounts do not necessarily reflect actual future cash flow requirements. 
 
 The table above excludes uncommitted revolving credit facilities extended by Commercial Services to its clients for working capital purposes. In connection with these facilities, Commercial Services has the sole discretion throughout the duration of these facilities to determine the amount of credit that may be made available to its clients at any time and whether to honor any specific advance requests made by its clients under these credit facilities. 
 
 Letters of Credit 
 Standby letters of credit are commitments to pay the beneficiary thereof if drawn upon by the beneficiary upon satisfaction of the terms of the letter of credit. Those commitments are primarily issued to support public and private borrowing arrangements. To mitigate its risk, BancShares’ credit policies govern the issuance of standby letters of credit. The credit risk related to the issuance of these letters of credit is essentially the same as in extending loans to clients and, therefore, these letters of credit are collateralized when necessary. These financial instruments generate fees and involve, to varying degrees, elements of credit risk in excess of amounts recognized in the Consolidated Balance Sheets. 
 
 Deferred Purchase Agreements 
 A deferred purchase agreement (“DPA”) is provided in conjunction with factoring, whereby a client is provided with credit protection for trade receivables without purchasing the receivables. The trade receivables terms generally require payment in 90 days or less. If the client’s customer is unable to pay an undisputed receivable solely as the result of credit risk, BancShares is then required to purchase the receivable from the client, less any borrowings for such client based on such defaulted receivable. The outstanding amount in the table above, less $ 241 million and $ 166 million at September 30, 2025 and December 31, 2024, respectively, of borrowings for such clients, is the maximum amount that BancShares would be required to pay under all DPAs. This maximum amount would only occur if all receivables subject to DPAs default in the manner described above, thereby requiring BancShares to purchase all such receivables from the DPA clients. 
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 The table above includes $ 1.83 billion and $ 1.74 billion of DPA exposures at September 30, 2025 and December 31, 2024, respectively, related to receivables on which BancShares has assumed the credit risk. The table also includes $ 37 million and $ 59 million available under DPA credit line agreements provided at September 30, 2025 and December 31, 2024, respectively. The DPA credit line agreements specify a contractually committed amount of DPA credit protection and are cancellable by us only after a notice period, which is typically 90 days or less. 
 
 Litigation and Other Contingencies 
 The Parent Company and certain of its subsidiaries have been named as a defendant in legal actions arising from its normal business activities in which damages in various amounts are claimed. BancShares is also exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed. 
 
 BancShares is involved, and from time to time in the future may be involved, in a number of pending and threatened judicial, regulatory, and arbitration proceedings as well as proceedings, investigations, examinations and other actions brought or considered by governmental and self-regulatory agencies. These matters arise in connection with the ordinary conduct of BancShares’ business. At any given time, BancShares may also be in the process of responding to subpoenas, requests for documents, data and testimony relating to such matters and engaging in discussions to resolve the matters (all of the foregoing collectively being referred to as “Litigation”). While most Litigation relates to individual claims, BancShares may be subject to putative class action claims and similar broader claims and indemnification obligations. 
 
 In light of the inherent difficulty of predicting the outcome of Litigation matters and indemnification obligations, particularly when such matters are in their early stages or where the claimants seek indeterminate damages, BancShares cannot state with confidence what the eventual outcome of the pending Litigation will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines, or penalties related to each pending matter will be, if any. In accordance with applicable accounting guidance, BancShares’ establishes reserves for Litigation when those matters present loss contingencies as to which it is both probable that a loss will occur and the amount of such loss can reasonably be estimated. Based on currently available information, BancShares does not believe that the outcome of Litigation that is currently pending will have a material impact on BancShares’ consolidated financial statements. The actual results of resolving such matters may be substantially higher than the amounts reserved. 
 
 For certain Litigation matters in which BancShares is involved, BancShares is able to estimate a range of reasonably possible losses in excess of established reserves and insurance. For other matters for which a loss is probable or reasonably possible, such an estimate cannot be determined. For litigation and other matters where losses are reasonably possible and estimable, management currently estimates an aggregate range of reasonably possible losses to be up to approximately $ 20 million in excess of any established reserves and any insurance we reasonably believe we will collect related to those matters. This estimate represents reasonably possible losses (in excess of established reserves and insurance) over the life of such Litigation, which may span a currently indeterminable number of years, and is based on information currently available as of September 30, 2025. The Litigation matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. 
 
 Those Litigation matters for which an estimate is not reasonably possible or as to which a loss does not appear to be reasonably possible, based on current information, are not included within this estimated range and, therefore, this estimated range does not represent BancShares’ maximum loss exposure. 
 
 The foregoing statements about BancShares’ Litigation are based on BancShares’ judgments, assumptions, and estimates and are necessarily subjective and uncertain. In the event of unexpected future developments, it is possible that the ultimate resolution of these cases, matters, and proceedings, if unfavorable, may be material to BancShares’ consolidated financial position in a particular period. 
 
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
FIRST CITIZENS BANCSHARES INC /DE/ 10-Q

Item 1. Financial Statements
